rspo inani 2016 audit checklist

Audit Report

Doc ID: 7272 / Issue Desember 2016 Copyright © SAI Global Limited 2011 – ABN 67 050 611 of 237

Audit Report

1

st Annual Surveillance Audit for

PT. HARI SAWIT JAYA - Negri Lama 2 Mill and Its Supply Bases FMS40024 RSPO Membership number: 1-0022-06-000-00 RSPO Member name: PT. INTI INDOSAWIT SUBUR Audited Address:

Negri Lama 2 Mill:

Negeri Lama Seberang Village, Bilah Hilir District, Labuhan Batu Regency, North Sumatera IDN

Its supply bases:

Negri Lama Utara Estate:


Negri Lama Central Estate:


Negri Lama Selatan Estate:


Aek Kuo Estate:

Aek Korsik Village, Aek Natas District, Labuhan Batu Regency, North Sumatera IDN Date of audit: 20 – 23 December 2016

Audit Report


Table of contents Page Executive Overview 5 Abbreviations Used 6 1.0 SCOPE OF THE ASSESSMENT 7 1.1 Introduction 7 1.2 Audit Objective 7 1.3 Scope of Certification 7 1.3.1 Palm Oil Mill 8 1.3.2 Oil Palm Estate 8 1.4 Location of Mill and Estates 8 1.5 Description of Supply Base 9 1.6 Date of Plantings 14 1.7 Area of Plantation 14 1.8 Approximate Tonnages Offered for Certification (CPO and PK) 15 1.9 Other Certificates Held 19 1.10 Organisational Information/Contact Person 19 1.11 Time Bound Plan for Other Management Units 19 1.12 Partial Certification Requirements 22 1.13 Date of Issue of Certificate 23 2.0 AUDIT PROCESS 23 2.1 Certification Body 23 2.2 Audit Methodology 24 2.3 Qualification of the Lead Auditor and Audit Team Members 24 2.4 Stakeholder Consultation 25 2.5 Date of Next Surveillance Visit 29 3.0 AUDIT FINDINGS 30 3.1 Action taken on previous audit issues 30 3.2 Claim and use of certification mark and or logo 30 3.3 Description of audit findings 31 3.3.1 RSPO Principle and Criteria, Indonesian National Interpretation 31 3.3.2 Mill Supply Chain Requirements 139 3.3.2.1 Supply Chain Certification Standard 139 3.3.2.2 Supply Chain Certification System 153 3.4 Recommendation 155 3.5 Environmental and social risk for this scope of certification for planning of the

surveillance audit 155

3.6

Acknowledgement of Internal Responsibility and Formal Sign-off of Assessment Findings

155

List of Tables

Page

1 Mill and Estates GPS Locations 8 2

FFB Production of the Supply Base 9

3 Age Profile of Planted Palms 14 4 Land use Description of Negri Lama Selatan, Negri Lama Central, Negri Lama

Utara and Aek Kuo Estate in 2016 14

5 Estate and Area Planted 15 6 Negri Lama Selatan, Negri Lama Central, Negri Lama Utara and Aek Kuo

FFB Production Trend 2011-2015 15

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7 Negri Lama II Mill Total CPO and PK Production 2016 and Estimate Production of 2017

16

8 Negri Lama I Mill Total CPO and PK Production of 2016 17 9 Actual Negri Lama II Mill Production of CPO and PK derived from Negri Lama

Selatan, Negri Lama Central, Negri Lama Utara, and Aek Kuo Estate FFB in 2016 18

10 Estimated Negri Lama II Mill Production of CPO and PK from Negri Lama Selatan, Negri Lama Central, Negri Lama Utara, and Aek Kuo Estate FFB in 2017

19

20 11 Certificates Held by Mill and Estates 21 12 RSPO Certification Time Bound Plan 22 13 List of internal and external stakeholder 28 14 Actual Negri Lama I Mill RSPO Certified CPO and PK Delivered in 2015 30 List of Figures Page 1 Map of Negri Lama Selatan Estate and Negri Lama I and II Mill 10 2 Map of Negri Lama Central Estate 11 3 Map of Negri Lama Utara Estate 12 4 Map of Aek Kuo Estate 13 List of Appendixes Page A Audit Plan 155 B Previous Nonconformities, Corrective Actions and Opportunity for Improvement

Summary 160

C Nonconformities, Corrective Actions and Opportunity for Improvements Summary

163

D Stakeholder’s issues and comment 166 E Definition of, and action required with respect to audit findings 168 F Definition of, and action required with respect to audit findings for Supply Chain

Certification System 169

Audit Report


Executive Overview This is the first Annual Surveillance Audit. SAI Global has audited Negri Lama II Mill, PT. Hari Sawit Jaya and its supply bases operations that comprising one mill, four oil palm estate, support services and infrastructure. Negri Lama II Mill, PT. Hari Sawit Jaya once has been RSPO SC certified as independent Palm Oil Mill which sometimes received certified FFB from PT. Hari Sawit Jaya (Negri Lama Utara Estate, Negri Lama Central Estate and Negri Lama Selatan Estate) and PT. Andalas Intiagro Lestari (Aek Kuo Estate). On previous audit the organization change the processor of the certified FFB from Negri Lama I Mill to Negri Lama II Mill. Transfer audit was conducted on 14 – 18 March 2016. During this first annual surveillance audit, ten (10) Major Nonconformities were identified, three of them are upgrade from previous audit Minor NC. Follow up audit has been conducted and Major NCRs closed. The recommendation from this audit is waiting for responses from client regarding their Major Nonconformities.

Estimated tonnage of certified CPO produced 59,022.56 MT

Estimated tonnage of certified PK produced 11,955.88 MT

Audit Report


Abbreviations Used AK3U Occupational Health and Safety Expert (Ahli K3 Umum) AMDAL Environmental Impact Analysis (Analisis Dampak Lingkungan) BKM Log book of group leader activity (Buku Kegiatan Mandor) BLH Environmental Agency (Badan Lingkungan Hidup) BOD Biological Oxygen Demand BPN National Land Agency (Badan Pertanahan Nasional) COD Chemical Oxygen Demand CPO Crude Palm Oil CSR Corporate Social Responsibility EFB Empty fruit bunch ERT Emergency Response Team FFB Fresh Fruit Bunch FRF Fractionation and Refinery Factory GAPKI Gabungan Pengusaha Kelapa Sawit Indonesia GPS Global Positioning System Ha Hectare HACCP Hazard Analysis Critical Control Point HCV High Conservation Value HGU Land Use Title (Hak Guna Usaha) HIPERKES Industrial Hygienist IDN Indonesia IPM Integrated Pest Management ISCC International Sustainability Carbon Certification ISO International Standards Organisation ISPO Indonesia on Sustainable Palm Oil Jamsostek Man Power Social Assurance (Jaminan Sosial Tenaga Kerja) Kepmen Degree of Man Power Ministry (Keputusan Menteri Tenaga Kerja) KAK Aek Kuo Estate (Kebun Aek Kuo) KNC Negri Lama Central Estate (Kebun Negri Lama Central) KNS Negri Lama Selatan Estate (Kebun Negri Lama Selatan) KNU Negri Lama Utara Estate (Kebun Negri Lama Utara) KTU Head of Administration (Kepala Tata Usaha) KUD Cooperation of Village Unit (Koperasi Unit Desa) LA Land Appliacation LHP Daily Mill Report (Laporan Harian Pabrik) LTI Loss Time Incident LUK Estate Unit Report (Laporan Unit Kebun) LUP Mill Unit Report (Laporan Unit Pabrik) MCU Medical Check-Up MOS Mill Operation Summary MSDS Material Safety Data Sheet NCR Non Conformance Report NGO Non-Government Organisation OER Oil Extraction Rate OHS Occupational Health and Safety P2K3 Safety Committee P&C Principle and Criteria Permen/Permenaker Regulation of Man Power Ministry (Peraturan Menteri Tenaga Kerja) Permentan Regulation of Agricultural Ministry (Peraturan Menteri Pertanian) PHL Daily worker (Pekerja Harian Lepas) PK Palm Kernel PKWT Contracted worker (Pekerja Waktu Tertentu) PND Negri Lama II Mill (Pabrik Negri Lama Dua)

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PNS Negri Lama I Mill (Pabrik Negri Lama Satu) POME Palm Oil Mill Effluent PP Government Regulation (Peraturan Pemerintah) PPE Personal Protective Equipment PK Palm Kernel PKB Joint Working Agreement (Perjanjian Kerja Bersama) QC Quality Control R&D Research and Development RABQSA Quality Society of Australia RKH Daily Work Plan (Rencana Kerja Harian) RKL Environmental Management Plan (Rencana Pengelolaan Lingkungan) RPL Environmental Monitoring Plan (Rencana Pemantauan Lingkungan) RSPO Roundtable on Sustainable Palm Oil SA Social Accountability SCCS Supply Chain Certification System SEL Environmental Evaluation Study (Studi Evaluasi Lingkungan) SIA Social Impact Assessment SKU Permanent worker (Syarat Kerja Utama) SPSI Indonesian Worker Union (Serikat Pekerja Seluruh Indonesia) SOP Standard Operational Procedure UKL Environmental Management Effort (Upaya Pengelolaan Lingkungan) UPL Environmental Monitoring Effort (Upaya Pemantauan Lingkungan) Walhi (Wahana Lingkungan Hidup Indonesia) WWF World Wild Fund WWTP Waste Water Treatment Plant YOP Year of Planting

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1.0 SCOPE OF THE CERTIFICATION ASSESSMENT 1.1 Introduction SAI Global conducted an audit of PT. Hari Sawit Jaya, Negri Lama II Mill and Its Supply Base on 20 – 23 December 2016 with ten (10) Major Nonconformities were identified, three of them are upgrade from last audit Minor NC. Follow up audit scheduled in midweek of February 2017. The purpose of this audit report is to summarise the degree of compliance with the relevant criteria, as defined on the cover page of this report, based on the evidence obtained during the audit of your organisation. SAI Global audits are carried out within the requirements of SAI Global procedures which also reflected the requirements and guidance provided in the international standards relating to audit practice such as ISO/IEC 17021, ISO 19011, RSPO Certification System, relevant RSPO Supply Chain Certification System and other normative criteria. SAI Global Auditors are assigned to audits according to industry, standard or technical competencies appropriate to the organisation being audited. Details of such experience and competency are maintained in our records. The audit team is detailed in the attached audit record. In addition to the information contained in this audit report, SAI Global maintains files for each client. These files contain details of organisation size and personnel as well as evidence collected during preliminary and subsequent audit activities (Documentation Review and Scope) relevant to the application for initial and continuing certification of your organisation. Details of your primary contact persons and their contact details and site addresses are also maintained. Please take care to advise us of any change that may affect the application/certification or may assist us to keep your contact information up to date, as required by SAI Global Terms and Conditions. Please note that this report is subject to independent review and approval. Should changes to the outcomes of this report be necessary as a result of the review, a revised report will be issued and will supersede this report. 1.2 Audit Objective This is the first Annual Surveillance Audit. The purpose of this audit was to determine continuing compliance of your organization’s management system with the audit criteria RSPO PC INA-NI 2016 version September 30th 2016 and RSPO Supply Chain Certification Standard, CPO Mill, Module E Mass Balance, version November 2014 and its effectiveness in achieving continual improvement and system objectives.

Also to verify the volume of certified and uncertified FFB entering the mill and volume sales of RSPO certified producers. 1.3 Scope of certification The scope of certification is the CPO production from one (1) Palm Oil Mill and three (3) FFB supply bases owned by PT. Hari Sawit Jaya and one (1) Oil Palm Estate owned by subsidiary.

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1.3.1 Palm Oil Mill and Estate Negri Lama II Mill, PT. Hari Sawit Jaya Location: Negeri Lama Seberang Village, Bilah Hilir District, Labuhan Batu Regency,

North Sumatera Indonesia GPS Location: East 100⁰ 02' 08'' North 20

21’ 35” Mill capacity: 45 MT FFB/hour (permit: 60 MT FFB/hour) 1.3.2 Oil Palm Estate 1.3.2.1 Negri Lama Selatan Estate, PT. Hari Sawit Jaya Location: Negeri Lama Seberang Village, Bilah Hilir District, Labuhan

Batu,Regency, North Sumatera Indonesia GPS Location: East 99o 59’ 08” – 100o 02’ 36” North 2o 16’ 29” – 2o 23’ 28” Total Certified Area 4.790 Ha 1.3.2.2 Negri Lama Central Estate, PT. Hari Sawit Jaya Location: Negeri Lama Seberang Village, Bilah Hilir District, Labuhan

Batu,Regency, North Sumatera Indonesia GPS Location: East 99o 58’ 45” – 100o 02’ 37” North 2o 21’ 15” – 2o 25’ 40” Total Certified Area 3.146 Ha 1.3.2.3 Negri Lama Utara Estate, PT. Hari Sawit Jaya Location: Negeri Lama Seberang Village, Bilah Hilir District, Labuhan

Batu,Regency, North Sumatera Indonesia GPS Location: East 99o 58’ 56” – 100o 02’ 35” North 2o 23’ 54” – 2o 28’ 30” Total Certified Area 4.030 Ha 1.3.2.4 Aek Kuo Estate, PT. Andalas Intiagro Lestari Location: Aek Korsik Village, Aek Natas District, Labuhan Batu Regency, North

Sumatera Indonesia GPS Location: East 99o 54’ 18” – 99o 59’ 00” North 2o 22’ 58” – 2o 26’ 00” Total Certified Area 2.088 Ha

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1.4 Location of mill and estates

PT. Hari Sawit Jaya Negri Lama II Mill and supply bases and PT. Andalas Intiagro Lestari are located in North Sumatera Province, Indonesia. The geographical coordinate of the mill and estates are shown on Table 1.

Table 1: Mill and Estates GPS Locations

MILL AND ESTATE EASTING NORTHING

Negri Lama II Mill (PND), PT. Hari Sawit Jaya

100⁰ 02' 29'' E 2021’35” N

Negri Lama Selatan Estate (KNS), PT. Hari Sawit Jaya

99o 59’ 08” – 100

o 02’ 36” E 2

o 16’ 29” – 2

o 23’ 28” N

Negri Lama Central Estate (KNC), PT. Hari Sawit Jaya

99o 58’ 45” – 100

o 02’ 37” E 2

o 21’ 15” – 2

o 25’ 40” N

Negri Lama Utara Estate (KNU), PT. Hari Sawit Jaya

99o 58’ 56” – 100

o 02’ 35” E 2

o 23’ 54” – 2

o 28’ 30” N

Aek Kuo Estate (KAK), PT. Andalas Intiagro Lestari

99o 54’ 18” – 99

o 59’ 00” E 2

o 22’ 58” – 2

o 26’ 00” N

Source: PT. Hari Sawit Jaya, March 2016

1.5 Description of supply base The FFB source are three (3) oil palm estates owned by PT. Hari Sawit Jaya and one (1) Oil Palm Estate owned by subsidiary PT. Andalas Intiagro Lestari and the third party estate. Supply from the third party was bought only when needed. The third party (independent small holders) sold FFB to the Mill based on the agreed price and did not have special agreement with the organisation. There is no scheme smallholder associated with Negri Lama II Mill. The hectarage and estimated FFB production of the plantation are shown on Table 2.

Table 2: Estimated FFB Production of the supply base

ESTATE PRODUCTION

AREA (HA)

TBM AREA /REPLANTING (HA)

ESTIMATED FFB PRODUCTION 2017

(TON/YEAR)

Negri Lama Selatan Estate 4,620

99

124,601.85

Negri Lama Central Estate 3,139

0 79,082.34

Negri Lama Utara Estate 1,698

2,198

41,994.15

Aek Kuo Estate PT. Andalas Intiagro Lestari

613

1,420

15,925.66

Total 10,070

3,717

261,604.00

Source: Asian Agri, December 2016

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Figure 1 Map of Negri Lama Selatan Estate and Negri Lama I and II Mill

Source: PT. Hari Sawit Jaya, December 2016

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Figure 2 Map of Negri Lama Central Estate


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Figure 3 Map of Negri Lama Utara Estate


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Figure 4 Map of Aek Kuo Estate

Source: PT. Andalas Inti Lestari, December 2016

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1.6 Date of plantings

Table 3: Age Profiles of Planted Palms in 2016

Year of Planting

Negri Lama Selatan Estate (KNS)

Negri Lama Central Estate (KNC)

Negri Lama Utara Estate (KNU)

Aek Kuo Estate, PT.

Andalas Intiagro Lestatri (KAK)

Total % of Planted

Area

1993 - - 426 - 426 3.10%

1994 - - 529 266 795 5.78%

1995 - - - 58 58 0.42%

1996 - - - - - 0.00%

1997 - - - 150 150 1.09%

1998 - - 194 100 294 2.14%

1999 - - - - - 0.00%

2000 - - - - - 0.00%

2003 - - - 481 481 3.50%

2006* 189 - - - 189 1.37%

2010* 1,116 822 - - 1,938 14.09%

2011* 1,465 625 552 - 2,642 19.21%

2012* 743 1,689 214 - 2,646 19.24%

2013* 1,057 - 452 - 1,509 10.97%

Mature 4,570 3,136 2,367 1,055 11,128 80.93%

2014* - - 838 547 1,385 10.07%

2015* 116 - 691 431 1,238 9.00%

Immature 116 - 1,529 978 2,623 19.07%

Total 4,686 3,136 3,896 2,033 13,751 100.00%

Source: Asian Agri, March 2016 Note : *) replanting

1.7 Area of plantation The areas details for organisation owned estates are shown on Table 5. Review of estate boundary maps has been done. There is no open area since November 2005. Plantation of 2006 – 2015 was replanting.

Table 4: Land use description of Estates in 2016

AREA

Negri Lama

Selatan Estate (KNS)

Negri Lama

Central Estate (KNC)

Negri Lama Utara Estate

(KNU)

Aek Kuo Estate, PT.


Total (Ha)

Mature area 4,620 3,139 1,698 613 10,070

Immature area 99 - 2,198 1,420 3,717

Total planted area 4,719 3,139 3,896 2,033 13,787

Emplacement 25 7 25 55 112

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AREA

Negri Lama

Selatan Estate (KNS)

Negri Lama

Central Estate (KNC)

Negri Lama Utara Estate

(KNU)

Aek Kuo Estate, PT.


Total (Ha)

HCV - - 109 - 109

Nursery 23 - - - 23

Mill 8 - - - 8

POME 15 - - - 15

Total unplanted area 71 7 134 55 267

Total certified area 4,790 3,146 4,030 2,088 14,054


Table 5: Estates and Area Planted in 2016

ESTATE MATURE (HA) IMMATURE (HA)

Negri Lama Selatan Estate 4,620 99

Negri Lama Central Estate 3,139 -

Negri Lama Utara Estate 1,698 2,198

Aek Kuo Estate PT. Andalas Intiagro Lestari

613 1,420

Total 10,070 3,717

Source: PT. Hari Sawit Jaya, December 2016 1.8 Approximate tonnages offered for certification (CPO and PK) Approximate tonnages offered for certification is estimated based on the organisation last three years actual FFB/CPO/PK production from Negri Lama Selatan, Negri Lama Central, Negri Lama Utara and Aek Kuo Estate and possibility increasing of young palm production in several estates (see Table 3, 8 and 9). Table 6: Negri Lama Selatan, Negri Lama Central, Negri Lama Utara and Aek Kuo Estate FFB

Production Trend 2011 – 2015

YEAR Actual Production (MT)

2011 187,252

2012 130,139

2013 116,200

2014 124,310

2015 186,414

Source: PT. Hari Sawit Jaya, March 2016

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Table 7: Negri Lama II Mill Total CPO and PK Production of 2016 and Estimate Production of 2017

Supply Base FFB Processed CPO

Production (MT)

OER (%) PK

Production (MT)

KER

(MT) (%)

Actual production Dec 2015 - Nov 2016

Negri Lama Selatan

60,647.07

14,224.76

23.45

2,592.37 4.27

Negri Lama Central

44,263.87

10,166.73

22.97

1,892.91 4.28

Negri Lama Utara

21,662.34

4,961.64

22.90

930.66 4.30

Aek Kuo Estate

7,208.55

1,659.72

23.02

311.05

Sub Total Own Estate*

133,781.84

31,012.85

23.18

5,726.99

4.28

Other Supply Base 62,393.76

10,800.36

17.31

3,347.01

5.36 The 3

rd Party

Total actual production

196,175.59

41,813.21

21.31

9,074.00

4.63

Estimate production Dec 2016 - Nov 2017

Negri Lama Selatan

124,601.85

28,686.96

23.02

5,633.20

4.52

Negri Lama Central

79,082.34

17,780.92

22.48

3,578.12

4.52

Negri Lama Utara

41,994.15

8,788.48

20.93

1,898.82

4.52

Aek Kuo Estate

15,925.66

3,766.20

23.65

845.74

5.31


261,604.00

59,022.56

22.56

11,955.88

4.57

Other Supply Base -

-

-

The 3rd

Party

Total estimated production

261,604.00

59,022.56

22.56

11,955.88

4.57


The FFB from Negri Lama Selatan, Negri Lama Central, Negri Lama Utara and Aek Kuo Estate are processed together with FFB from other supply based, therefore Negri Lama II Mill used RSPO Supply Chain Mass Balance Model – Module E.

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Table 8: Negri Lama I Mill Total CPO and PK Production of 2016

Supply Base FFB Processed CPO

Production (MT)

OER (%) PK

Production (MT)

KER

(MT) (%)

Actual production Dec 2015 - Nov 2016

Negri Lama Selatan

60,647.07

14,224.76

23.45

2,592.37 4.27

Negri Lama Central

44,263.87

10,166.73

22.97

1,892.91 4.28

Negri Lama Utara

21,662.34

4,961.64

22.90

930.66 4.30

Aek Kuo Estate

7,208.55

1,659.72

23.02

311.05


133,781.84

31,012.85

23.18

5,726.99

4.28

Other Supply Base 62,393.76

10,800.36

17.31

3,347.01

5.36 The 3

rd Party

Total actual production

196,175.59

41,813.21

21.31

9,074.00

4.63


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Table 9: Actual Negri Lama II Mill Production of CPO and PK derived from Negri Lama Selatan, Negri Lama Central, Negri Lama Utara, and Aek Kuo Estate FFB in 2016*

Source: PT. Hari Sawit Jaya, December 2016 *Negri Lama Selatan, Negri Lama Central, Negri Lama Utara, and Aek Kuo Estate are the certified FFB sources

KNS KNC KNU KAK Sub Total KNS KNC KNU KAK Sub Total KNS KNC KNU KAK Sub Total

Dec-15 - - - - - 14,162.27 - - - - - 2,559.55 - - - - - 758.17

Jan-16 6,422.57 4,545.47 2,559.35 1,077.74 14,605.13 - 1,457.34 1,005.73 580.76 247.58 3,291.42 - 300.06 212.37 119.60 50.23 682.26 -

Feb-16 7,138.01 4,760.94 2,643.47 1,043.20 15,585.62 - 1,599.05 1,040.71 592.17 237.16 3,469.08 - 309.34 206.29 114.52 45.28 675.42 -

Mar-16 7,705.52 5,176.86 2,604.14 946.56 16,433.07 - 1,798.36 1,178.33 608.74 223.80 3,809.23 - 325.52 218.68 109.89 39.95 694.04 -

Apr-16 7,837.38 5,349.88 2,808.38 1,046.66 17,042.30 - 1,887.93 1,253.28 674.70 255.14 4,071.05 - 338.69 230.83 121.10 45.47 736.09 -

May-16 71.94 49.97 32.87 10.62 165.40 14,776.54 14.63 9.97 6.38 2.05 33.03 2,420.89 3.33 2.31 1.52 0.49 7.65 764.12

Jun-16 - - - - - 14,563.77 - - - - - 2,442.05 - - - - - 831.20

Jul-16 - - - - - 14,858.54 - - - - - 2,640.07 - - - - - 786.87

Aug-16 6,877.33 5,519.88 2,715.98 744.86 15,858.04 1,723.24 1,611.09 1,269.63 609.93 166.85 3,657.49 308.13 303.62 242.23 120.48 32.80 699.12 83.64

Sep-16 7,822.45 6,582.20 3,124.30 972.61 18,501.56 1,902.41 1,863.46 1,538.74 710.93 218.76 4,331.90 353.92 340.66 289.53 136.65 42.21 809.05 104.57

Oct-16 8,480.46 6,463.17 2,713.99 705.63 18,363.24 307.04 2,063.10 1,541.95 630.96 162.73 4,398.73 57.59 352.58 268.64 112.70 29.34 763.26 14.50

Nov-16 8,291.41 5,815.51 2,459.87 660.68 17,227.48 99.96 1,929.80 1,328.39 547.09 145.66 3,950.93 18.16 318.59 222.04 94.21 25.28 660.12 3.95

Total 60,647.07 44,263.87 21,662.34 7,208.55 133,781.838 62,393.76 14,224.76 10,166.73 4,961.64 1,659.72 31,012.85 10,800.36 2,592.37 1,892.91 930.66 311.05 5,726.99 3,347.01

Month

Total FFB (Ton) CPO Produced (Ton) Palm Kernel Produced (Ton)

3rd Party

Own Estate

3rd Party

Own Estate

3rd Party

Own Estate

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Table 10: Estimated Negri Lama II Mill Production of CPO and PK from Negri Lama Selatan, Negri Lama Central, Negri Lama Utara, and Aek Kuo Estate FFB in 2017*

Source: PT. Hari Sawit Jaya, March 2016 *Negri Lama Selatan, Negri Lama Central, Negri Lama Utara, and Aek Kuo Estate are the certified FFB sources

KNS KNC KNU KAK Sub Total KNS KNC KNU KAK Sub Total KNS KNC KNU KAK Sub Total

Dec-16 8,706.914 6,471.260 3,028.647 707.313 18,914.134 - 1,741.383 1,261.896 605.729 707.313 4,316.321 - 417.932 310.620 145.375 160.914 1,034.841 -

Jan-17 7,484.893 4,940.831 2,509.748 735.493 15,670.965 - 1,740.238 1,124.039 527.047 147.834 3,539.158 - 336.820 222.337 112.939 33.097 705.193 -

Feb-17 7,211.363 4,927.561 2,307.341 776.346 15,222.611 - 1,676.642 1,121.020 484.542 156.046 3,438.250 - 324.511 221.740 103.830 34.936 685.017 -

Mar-17 8,679.662 5,797.714 2,913.484 1,059.194 18,450.054 - 2,018.021 1,318.980 611.832 212.898 4,161.731 - 390.585 260.897 131.107 47.664 830.253 -

Apr-17 9,204.505 5,736.385 3,239.518 1,131.273 19,311.681 - 2,140.047 1,305.028 680.299 227.386 4,352.760 - 414.203 258.137 145.778 50.907 869.025 -

May-17 10,780.532 7,246.805 3,339.231 1,222.061 22,588.629 - 2,506.474 1,648.648 701.238 245.634 5,101.994 - 485.124 326.106 150.265 54.993 1,016.488 -

Jun-17 10,443.433 5,797.279 3,254.370 1,415.674 20,910.756 - 2,428.098 1,318.881 683.418 284.550 4,714.947 - 469.954 260.878 146.447 63.705 940.984 -

Jul-17 12,639.338 7,117.319 3,641.333 1,768.137 25,166.127 - 2,938.646 1,619.190 764.680 355.396 5,677.912 - 568.770 320.279 163.860 79.566 1,132.475 -

Aug-17 13,741.310 8,736.475 4,573.126 1,754.131 28,805.042 - 3,194.855 1,987.548 960.356 352.580 6,495.339 - 618.359 393.141 205.791 78.936 1,296.227 -

Sep-17 12,406.024 7,286.476 4,378.887 1,823.263 25,894.650 - 2,884.401 1,657.673 919.566 366.476 5,828.116 - 558.271 327.891 197.050 82.047 1,165.259 -

Oct-17 12,293.738 7,614.227 4,464.311 1,789.441 26,161.717 - 2,858.294 1,732.237 937.505 359.678 5,887.714 - 553.218 342.640 200.894 80.525 1,177.277 -

Nov-17 11,010.139 7,410.012 4,344.151 1,743.332 24,507.634 - 2,559.857 1,685.778 912.272 350.410 5,508.317 - 495.456 333.451 195.487 78.450 1,102.844 -

Total 124,601.851 79,082.344 41,994.147 15,925.658 261,604.000 - 28,686.956 17,780.918 8,788.484 3,766.201 59,022.559 - 5,633.203 3,578.117 1,898.823 845.740 11,955.883 -

Month

Total FFB (Ton) CPO Produced (Ton) Palm Kernel Produced (Ton)

Own Estate3rd Party3rd Party

Own Estate3rd Party

Own Estate

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Based on the above figures, the estimated of certified CPO and PK from certified area offered in 2016 for certification are:

Estimated tonnage of certified CPO produced 59,022.56 MT

Estimated tonnage of certified PK produced 11,955.88 MT

1.9 Other certificates held The organisation is implementing quality, environmental, and occupational health and safety management system based on ISO 14001:2004 and ISCC. The details of other certifications held are shown in the following table.

Table 11: Certificates Held by Mill and Estates

MILL/ESTATE OTHER CERTIFICATION HELD

Negri Lama II Mill ISO 14001:2004 by SGS Indonesia, Certificate number: ID05/65250, Expired date: 10 June 2017

Negri Lama II Mill, Negri Lama Selatan Estate, Negri Lama Central Estate, Negri Lama Utara Estate, Aek Kuo Estate

ISCC by SGS Germany GmbH, certificate number: EU-ISCC-Cert-DE100-20152530, Expired 31 August 2017.

Source: PT. Hari Sawit Jaya, March 2016 1.10 Organizational information/contact person PT. Hari Sawit Jaya Jl MH Thamrin No 31 Jakarta 10230 Phone : (+62-21) 2301119 Fax : (+62-61) 2301120 Contact person : Ms Asrini Subrata Stakeholder Relations Manager Email : [email protected] 1.11 Time bound plan for other management units PT. Hari Sawit Jaya and PT. Andalas Intiagro Lestari as a subsidiary of PT. Inti Indosawit Subur is committed to RSPO certification of all its Management Units located in North Sumatera, Riau and Jambi Province. Time bound plan has been developed to achieve the RSPO certification for all its Management Units and Plasma. The time bound plan is realistic and challenging. The plan was detailed on Table 11. The time bound plan was revised in February 2016. It was noted that all Management Units have been audited for RSPO certification and 2016 for Plasma, except several areas which land use title are not ready.

mailto:[email protected]

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Table 12: RSPO Certification Time Bound Plan

Name of Mill

Mill Address Name of Supply Base Plantation

Estate Address

Time bound for

certification Status

Buatan I Mill

Delik & Pangkalan Kerinci Village, Bunut Langgam District, Pelalawan Regency, Riau

Buatan Estate Delik & Pangkalan Kerinci Village, Bunut Langgam District, Pelalawan Regency, Riau

Certified on 16 September 2010

Re-Certified on 17 September

2015 Buatan (Plasma) Delik & Pangkalan Kerinci Village, Bunut Langgam District, Pelalawan Regency, Riau

Buatan II Mill

Delik & Pangkalan Kerinci Village, Bunut Langgam District, Pelalawan Regency, Riau

Buatan Estate Delik & Pangkalan Kerinci Village, Bunut Langgam District, Pelalawan Regency, Riau


Re-Certified on 14 Desember

2015

Buatan (Plasma) Delik & Pangkalan Kerinci Village, Bunut Langgam District, Pelalawan Regency, Riau

Ukui I Mill

Ukui Village, Ukui District, Pelalawan Regency, Riau

Ukui Estate Ukui Village, Ukui District, Pelalawan Regency, Riau

Re-Certified on 29 Februari

2016

Ukui (Plasma) Ukui & Lubuk Batu Jaya District, Pelalawan & Inhu Regency, Riau


2016

Ukui II Mill Ukui Village, Ukui District, Pelalawan Regency, Riau

Soga Estate Ukui Village, Ukui District, Pelalawan Regency, Riau


2016

Ukui (Plasma) Ukui & Lubuk Batu Jaya District, Pelalawan & Inhu Regency, Riau


2016

Tungkal Ulu Mill

Pulau Pauh / Penyabungan / Merlung Village, Tungkal Ulu District, Tanjung Jabung Regency, Jambi

Tungkal Ulu Estate

Pulau Pauh / Penyabungan / Merlung Village, Tungkal Ulu District, Tanjung Jabung Regency, Jambi

Certified on 15 August 2012

Tungkal Ulu (Plasma)

Renah Mendalo, Merlung, Muara Papalik District, Tanjung Jabung Barat Regency, Jambi

Certified on 11 July 2013

Muara Bulian Mill

Singoan / Bukit Sari / Bulian Jaya Village, Muara Bulian / Pemayung District, Batang Hari Regency, Jambi

Muara Bulian Estate

Singoan / Bukit Sari / Bulian Jaya Village, Muara Bulian / Pemayung District, Batang Hari Regency, Jambi


Muara Bulian (Plasma)

Maro Sebo Ilir District, Batanghari Regency, Jambi


Topaz Mill Petapahan Village, Tapung District, Kampar Regency, Riau

Topaz & Seed Garden Estate

Petapahan Village, Tapung District, Kampar Regency, Riau

Certified on 30 March 2015

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Name of Mill


Estate Address

Time bound for


Taman Raja Mill

Lubuk Bernai / Kampung Baru / Pelabuhan Dagang / Pematang Pauh Vilage, Tungkal Ulu District, Tanjung Jabung Regency, Jambi

Taman Raja & Badang Estate

Lubuk Bernai / Kampung Baru / Pelabuhan Dagang / Pematang Pauh Vilage, Tungkal Ulu District, Tanjung Jabung Regency, Jambi

Certified on 20 February 2015

Segati Mill Langkan / Penarikan / Tambak / Sotol Village, Langgam District, Pelalawan Regency, Riau

Segati Estate Langkan / Penarikan / Tambak / Sotol Village, Langgam District, Pelalawan Regency, Riau

Main Audit in 8 – 18

December 2014 by BSI

Group Indonesia

On Progress awaiting for certificate

Penarikan & Gondai Estate

Pangkalan Sarik / Baru Village, Langgam / Siak Hulu District, Pelalawan / Kampar Regency, Riau

Main Audit in 8 – 18

December 2014 by BSI

Group Indonesia

On Progress awaiting for certificate

Penarikan (KKPA) Pangkalan Sarik / Baru Village, Langgam / Siak Hulu District, Pelalawan / Kampar Regency, Riau

2018 Gap analysis and Internal audit in May 2016. Also,

socialization to farmers

Gunung Sahilan (KKPA)

Gunung Sahilan Village, Lipat Kain District, Pelalawan Regency, Riau

2018 -

Tanah Datar Mill

Tanah Datar Petatal Village, Talawi District, Asahan Regency, North Sumatera

Tanah Datar Estate

Tanah Datar Petatal Village, Talawi District, Asahan Regency, North Sumatera

Certified on 18 May 2015

Bahilang Estate Bahilang Village, Tebing Tinggi District, Serdang Bedagai Regency, North Sumatra

Aek Nabara Mill

S1-S3 / Sukadame Village, Bilah Hulu / Kota Pinang District, Labuhan Batu Regency, North Sumatra

Aek Nabara Estate

S1-S3 / Sukadame Village, Bilah Hulu / Kota Pinang District, Labuhan Batu Regency, North Sumatra

Certified on 6 March 2015

Teluk Panjie Mill

Teluk Panjie Village, Kampung Rakyat District, Labuhan Batu Regency, North Sumatra

Teluk Panjie Estate

Teluk Panjie Village, Kampung Rakyat District, Labuhan Batu Regency, North Sumatra

Certified on 21 April 2015

Peranap Mill

Simelinyang / Pauh Ranap / Sengkilo Village, Peranap District, Indragiri Hulu Regency, Riau

Peranap Estate Simelinyang / Pauh Ranap / Sengkilo Village, Peranap District, Indragiri Hulu Regency, Riau

Certified on 7 January 2015

Peranap (Plasma) Simelinyang / Pauh Ranap / Sengkilo Village, Peranap District, Indragiri Hulu Regency, Riau


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Name of Mill


Estate Address

Time bound for


Bungo Tebo Mill

Tuo Sumai / Sungai Rambai Village, PWK Sumai / Tebo Ulu District, Bungo Tebo Regency, Jambi

Bungo Tebo Estate


Certified on 3 December 2015

Bungo Tebo (Plasma)


Certified on 7 February 2017

Tanjung Selamat Mill

Kampung Padang Village, Bilah Hilir District, Labuhan Batu Regency, North Sumatra

Tanjung Selamat Kampung Padang Village, Bilah Hilir District, Labuhan Batu Regency, North Sumatra


Pangkatan Sennah Village, Bilah Hilir District, Labuhan Batu Regency, North Sumatra


Gunung Melayu I

Rahuning Village, Bandar Pulau District, Asahan Regency, North Sumatra

Pulau Maria Estate

Rahuning Village, Bandar Pulau District, Asahan Regency, North Sumatra


Gunung Melayu II

Gonting Mahala Village, Bandar Pulau District, Asahan Regency, North Sumatra

Sentral & Batu Anam Estate

Gonting Mahala Village, Bandar Pulau District, Asahan Regency, North Sumatra


Negri Lama II Negri Lama Seberang Village, Bilah Hilir District, Labuhan Batu Regency, North Sumatra

Negri Lama Negri Lama Seberang Village, Bilah Hilir District, Labuhan Batu Regency, North Sumatra

- Certified on 23 December 2016 as Independent Mill

- Audit in 2016 as Mill and Supply Base

Aek Kuo Aek Korsik Village, Aek Natas District, Labuhan Batu Regency, North Sumatra

Negri Lama I Negri Lama Seberang Village, Bilah Hilir District, Labuhan Batu Regency, North Sumatra

*3rd

party which is excluded from scope of certification

Negri Lama Seberang Village, Bilah Hilir District, Labuhan Batu Regency, North Sumatra

- Certified on 8 April 2015

- Audit in 2016 as Independent Mill

Source: PT. Hari Sawit Jaya, December 2016 1.12 Partial Certification Requirements All Management Units have been audited for RSPO Certification based on Table 13: RSPO Certification Time Bound Plan, except several areas which land use title are not ready. The organisation has internal auditor which conducted the site visit and review regarding no replacement of primary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3, land conflict, labour disputes and legal non-compliance to all management units which have not been

Audit Report


certified. Site visit was conducted on July 2016. Based on the review it was concluded that:

No new plantings have replaced primary forest or any area required to maintain or enhance one or more High Conservation Value in accordance with RSPO criterion 7.3.

There were no land conflict and labour disputes

There was no non-compliance with regulations based on internal gap analysis. Statuses of land use title for the related management unit were:

Segati Mill, PT. Mitra Unggul Perkasa: audit has been conducted in December 2014, however certificate has not been issued yet since there is a problem regarding NPP.

Topaz Estate, PT. Tunggal Yunus Estate: Until this annual surveillance audit is on progress for recommendation regarding Location Permit applied to Regent (Bupati) of Kampar for area 230 Ha.

Negeri Lama Estate, PT. Hari Sawit Jaya: Land titles HGU Extension No.02-12-00-00-2-00074 issued on 29 February 2016 includes SK BPN Sumatera Utara No.3/HGU/BPN.12/XI/2015 dated 8 December 2015 regarding extension land titles issues for PT Hari Sawit Jaya for area coverage 188.75 Ha. Other HGU of the rest of area (Aek Kuo Estate, PT. Andalas Inti Lestari) until this annual surveillance audit is still in process for technical consideration in gaining Location Permit from Land Agency (BPN) of Labuhan Batu Regency. Report of Risalah Panitia B No.05/PPT/B/2015 has been issued on 8 October 2015 mentioned that measurement and mapping for area in Aek Kuo Estate, PT. Andalas Intiagro Lestari has been conducted covering 547.94 Ha. There is no overlap with forest inside the area. The function of the area is APL and the allocation is Kawasan Budidaya Perkebunan Besar (Cultivation Area for Large Plantation).

Teluk Panjie Estate, PT. Supra Matra Abadi: based on information from Department of Legal at Pekanbaru Office, the area is still on progress for technical consideration in gaining Location Permit from Land Agency (BPN) of Rokan Hilir Regency, Riau Province.

1.13 Date of issue of certificate Date of issue of certificate: Originaly issued by SGS on 23 December 2015 Expiry date of certificate : 22 December 2020

2.0 AUDIT PROCESS 2.1 Certification body PT. SAI Global Indonesia Graha Iskandarsyah, 4th floor Jl. Iskandarsyah Raya No. 66 C Kebayoran Baru, Jakarta 12160, Indonesia Phone : +62 21 720 6186, 720 6460 Fax : +62 21 720 6207 Contact person : Ms Inge Triwulandari Technical Manager Email : [email protected] SAI Global is one of the world’s leading business providers of independent assurance. SAI Global provides organisations around the world with information services and solutions for managing risk, achieving compliance and driving business improvement. We provide aggregated access services to Standards, Handbooks, Legislative and Property publications; we audit, certify and register your product, system or supply chain; we facilitate good

mailto:[email protected]

Audit Report


governance and awareness of compliance, ethics and policy issues and provide training and improvement solutions to help individuals and organisations succeed. The SAI Global business is driven by two equally important client needs - the mandated need for organisations to conform to regulations, standards and legislation in all their locations, and the operational need for organisations to improve business processes and procedures as well as corporate culture. As we are a global company, we can meet these needs for any client - those operating within one country's borders and in one language or those operating across borders and in several languages.

There are three business units/divisions within SAI Global namely the Information Services Division, the Compliance Division, and the Assurance Division. The Assurance Division helps organisations manage risk, achieve process or product certification and drive improvement by providing training, registration audits and supplier management programs which can improve business performance. We provide independent audits, assessments and certification of your products or business processes to ensure they comply with industry standards or customer specific requirements. We understand how compliance with those standards can improve the efficiency, economy and profitability of your operation. With auditing and assessment staff located around the world, our clients include large global corporations as well as single site organisations. 2.2 Audit methodology The 1st Annual Surveillance Audit was performed on 20 – 23 December 2016. The audit programme was included in the body of report. The audit methodology for collection of objective evidences is site inspection, documentation and record review and interview with staffs, workers, and other stakeholders. Objective evidences from documentation/record review in one area may also be cross checked with other objective evidences in other areas and with the evidence of implementation on site during the audit. During the audit, particular attention has been paid to previous non-conformities. The previous minor non-conformities were checked for being closed. Assessments plan has included but not be limited to areas of potential environmental and social risk. Considering previous audit findings, the mill and all supply bases were audited during this surveillance audit. Audit has paid special attention on some potential risks in the following areas:

- All environment aspects of P&C including reporting of environmental management, waste handling (Negri Lama II Mill, Negri Lama Selatan Estate, Negri Lama Central Estate, Negri Lama Utara Estate and Aek Kuo Estate)

- All social aspects of P&C including land conflict issue (if any), customary right, labour issue, organization contribution (CSR program, empowerment of local community) (Negri Lama II Mill, Negri Lama Selatan Estate, Negri Lama Central Estate, Negri Lama Utara Estate and Aek Kuo Estate)

- All HCV aspects of P&C including identification, management and monitoring HCV (Negri Lama II Mill, Negri Lama Selatan Estate, Negri Lama Central Estate, Negri Lama Utara Estate and Aek Kuo Estate).

Audit plan is available in Appendix A of this report on page 153. 2.3 Qualification of the lead auditor and audit team member Eko Prastio Ramadhan – Acting Lead Auditor, auditor for social and labour issues in estates and mill.

Eko Prastio Ramadhan graduated as Bachelor of Forestry from Forest Conservation and Ecotourism Department, Faculty of Forestry, Bogor Institute of Agriculture (IPB) in 2008. He owned

Audit Report


working experience at NGO Birdlife Indonesia since May 2009 – December 2012 as Field Officer, at PT Inoa Konsultindo since May 2013 – November 2013 as Biodiversity Consultant and at PT Salim Ivomas Pratama Tbk since May 2014 – November 2015 as Assistant of Sustainability Department. He has completed training courses for LAT ISO 14001:2015 (July 2016), LAT RSPO P&C (May 2016), Social Impact Assessment (May 2016), RSPO SCC Auditor (2016), LAT ISO 9001:2008 (2015), ISPO Auditor (2015), Introduction to RSPO Supply Chain Certification (2015) and HCV Assessment and Identification (2014).

Eko Purwanto – Audit team member and best agriculture practice, auditor for land use tittle, RSPO Supply Chain and RSPO certification system clause 4.2.4

Eko Purwanto graduated as Bachelor of Forestry from Forest Conservation Department, Faculty of Forestry, Bogor Institute of Agriculture (IPB) in 2001. He owned working experience at Oil Palm Plantation in East Kalimantan since 2003 to 2012, the last position was Estate Manager. He has implemented good agricultural practice including integrated pest management and limited pesticides uses. He has completed lead auditor training courses for RSPO P & C (2013), ISO 9001:2008 (2012), ISO 14001:2004 (2013), ISPO (2012) and RSPO SCC (2012). He has also completed training course of ISO 14001 (2012), Minaut (Oil and Automotive) Indonesia (2011) and Introduction to HCV Toolkit HCV (2011). Since October 2012 he has been involved in quality (ISO 9001) management system audits for very broad industrial and involved in Indonesia Sustainable Palm Oil (ISPO) and RSPO P&C audit for several plantations and mills, also RSPO Supply Chain audit for several KCP, Bulking and Refinery. Nanang Rusmana - Audit Team Member and auditor for Environmental issues in mill and estates and HCV

Nanang Rusmana, Bachelor from Faculty of Forestry, Bogor Agricultural University (IPB) in 2005, Majoring in Forest Resources Conservation. He has a working experience in Environment Consultant as Staff Division Environment and Social at PT. Studiotama Maps Konsultan (2005-2006), in Palm Oil Plantations as SHE Assistant at PT. Astra Agro Lestari Tbk (2006-2012), and as HSE Coordinator at PT. Kapuas Prima Coal Group (2013-2016). He joined the SAI Global since April 2016 as Auditor ISO 9001, ISPO and RSPO. Various training has followed, such as: Lead Auditor ISO 9001:2015 Training (2016), Auditor ISPO Training (2016), Lead Auditor ISO 14001:2015 Training (2016), RSPO Supply Chain Certification Training (2016), Auditor SMK3 Training (2014), HCV Assessor Training (2010), OHS Expert/Ahli K3 Umum Training (2007), etc. Since 2016 he has had experience for audit ISO 9001 in various industries and services, include RSPO and ISPO audit for palm oil plantation companies. Ahmad Furqon – Audit Team Member and and Occupational Health and Safety issues in Mill and Estates

Ahmad Furqon graduated as bachelor from Department of Agronomy and Horticulture, Faculty of Agriculture, Bogor Agricultural Institute in 2010. Having work experience as Section Head of plantation in PT Astra Agro Lestari for 6 years. Having the experience in management of sustainable palm oil (RSPO and ISPO), environment management, social impact, and safety management system at palm oil plantations. Join at SAI Global since in Mei 2016 as Auditor for the ISO 9001:2015, ISPO, and RSPO. Involved in the quality management system for various the industry sectors, RSPO and ISPO. Some training that have been followed were Hazard Analysis and Critical Control Point (HACCP) (2013), Industrial Relation Training (2016), ISO 9001:2015 Lead Auditor Course (2016), ISO 14001:2015 Lead Auditor Course (2016), RSPO P&C Lead Auditor Course (2016), RSPO Supply Chain Lead Auditor Course (2016) and ISPO Lead Auditor Course (2016).

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2.4 Stakeholder consultation Stakeholder consultation was performed to internal and external stakeholders. Internal stakeholders included staffs and workers. External stakeholders were selected by considering that they have an interest in the organisation activities, directly border with organisation, area which the workers live. External stakeholders included NGO, governments and civil societies. Letters were also sent to external stakeholders to invite for comment or individual/ group discussion. Group & Individual discussion with stakeholders (Table 12) was conducted during audit, to verify compliance against relevant criteria and indicator related to land status and conflict, environmental, social aspect and HCV. Surrounding Village of estate and mill has been chosen to represent societies. Group & individual discussions were conducted for two sessions. First session was conducted especially for around stakeholder directly affected on estate and mill, i.e. Head of village, farmers. Second session was conducted especially for labour union, gender committee and selected workers. Group interview was conducted for workers with similar job while others were interviewed individually in the scope to verify compliance against relevant criteria and indicator related to infrastructure facility, labour, social aspect (discrimination and sexual harassment), environment and HCV. The result of stakeholder consultation was used to justify fulfilment of some indicators, e.g. criterion 2.2 indicator major 3, minor 1 and minor 2, criterion 2.3 indicator major 1, criterion 6.5 indicator minor 1, criterion 6.6 indicator minor 1, criterion 6.7 indicator minor 1, criterion 6.8 indicator minor 1, criterion 6.9 indicator minor 1, 2 and 3, criterion 6.10 indicator minor 1 and 2, criterion 6.11 indicator minor 1, etc. The result of these consultations was provided in Appendix D on page 226.

Table 13: List of internal and external stakeholder

STAKEHOLDERS METHODS OF CONSULTATION

Internal stakeholder (mill & estates)

Deputy Secretary of SPSI Individual discussion

Chairman of Gender Committee Individual discussion

Workers Group discussion for workers with similar role, otherwise individually interviewed

External Stakeholders (mill & estates)

Head of Villages, respective people and villagers representatives. - Sidomulyo Village - Sidomulyo 2 Village

Individual discussion

FFB Supplier Individual discussion

Social and Labour Agency Individual discussion

Agriculture and Plantation Agency Individual discussion

Environment Agency Individual discussion

National land Agency – Badan Pertanahan Nasional (BPN) Labuhan Batu Regency

An invitation letter to comment was sent

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STAKEHOLDERS METHODS OF CONSULTATION

District Police (Polsek Bilah Hilir) Individual discussion

District Head (Camat Bilah Hilir) An invitation letter to comment was sent

NGOs: AMAN (Aliansi Masyarakat Adat Nasional), GAPKI, Sawit Watch, WWF, Walhi Sumatera Utara, FFI, FP, Greeneconomics, Greenpeace, TNC, Tropenbos, Yayorin

An invitation letter to comment was sent

Bupati Labuhan Batu Regency An invitation letter to comment was sent

2.5 Date of next surveillance visit The next surveillance visit will be conducted around December 2017 or three months before datum month of the certification period.

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3.0 AUDIT FINDINGS 3.1 Action taken on previous audits findings All non-conformances (Major and Minor) from the previous audits have been followed up by taking corrective actions. Corrective actions have not been implemented entirely and causing 3 Minor NCR upgraded to Major NCR. 3.2 Claim and use of certification mark and or logo There was no use of certification mark and or logo. There was also no delivery of RSPO certified CPO in 2016 from Negri Lama II Mill. However RSPO certified CPO and PK in 2015 delivered from Negri Lama I Mill.

Table 14. Actual Negri Lama II Mill RSPO Certified CPO and PK Delivered in 2016

Month

CPO Delivered PK Delivered

RSPO ISCC Non Certified Total RSPO ISCC Non

Certified Total

Dec-15 - - 2,596.46 2,596.46 - - 834.36 834.36

Jan-16 - 2,713.27 55.09 2,768.36 584.26 - - 584.26

Feb-16 - 3,482.20 - 3,482.20 743.54 28.77 - 772.31

Mar-16 - 3,858.99 175.17 4,034.16 636.75 - 43.95 680.70

Apr-16 - 3,656.69 - 3,656.69 481.22 - - 481.22

May-16 - 1,224.35 2,378.74 3,603.09 372.13 - 667.84 1,039.97

Jun-16 - 200.00 2,350.73 2,550.73 - 52.23 576.23 628.46

Jul-16 - - 2,474.53 2,474.53 - - 841.07 841.07

Aug-16 - 3,765.67 291.56 4,057.23 575.380 - 300.62 876.00

Sep-16 - 4,118.73 627.12 4,745.85 754.785 - 127.07 881.85

Oct-16 - 4,553.87 - 4,553.87 691.170 - 16.00 707.17

Nov-16 - 3,992.39 - 3,992.39 880.190 - - 880.19

Total - 31,566.16 10,949.40 42,515.56 5,719.43 81.00 3,407.13 9,207.56

RSPO INA NI 2016 Audit Checklist


PRINCIPLES 1: COMMITMENT TO TRANSPARENCY

NO CRITERION / INDICATOR

CHECKLIST OBSERVATIONS & OBJECTIVE

EVIDENCE SUMMARY OF FINDINGS FOR EACH INDICATOR

COMPLIANCE (YES/NO)

1.1 Growers and millers provide adequate information to relevant stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages and forms to allow for effective participation in decision making. Guidance: Growers and millers should have a Standard Operating Procedure (SOP) to respond constructively to stakeholders, including a specific timeframe to respond to requests for information. Growers and millers should respond constructively and promptly to requests for information from stakeholders. The SOP should include information on the officer, who may be contacted by the interested external parties. Growers and millers should ensure that sufficient objective evidence exists to demonstrate that the response is timely and appropriate. See Criterion 1.2 for requirements relating to publicly available documentations. See Criterion 6.2 on consultation. See Criterion 4.1 on SOPs. Definition of relevant stakeholders according to the Regulation of the Minister of Environment No. 17 year 2012 regarding Guidance for Involvement of Communities in the Process of Environmental and Social Impact Assessment (AMDAL) and Environmental Permit are.

Affected communities are the communities who live within the AMDAL study boundary (social boundary), which will be beneficially or adversely affected by the operations and/or plan of activities;

Environmental concerned communities are communities who are not affected by the operations and/or business plan, however they shall pay attention to the environmental and social issues of the upcoming operations and/or business plan, including the potential environmental and social impacts;

Influenced communities by the decisions of AMDAL process are communities who are located outside and or directly adjacent to the boundary of AMDAL study areas relevant to the impact of operations and/or business plan.

Relevant stakeholders are also NGOs that have concerns on the environmental and social issues of the upcoming operations and/or business plan, including the potential environmental and social impacts;

1.1.1 List of information related to criterion 1.2 that can be accessed by relevant stakeholders shall be available. Specific Guidance: For 1.1.1: Evidence should be provided by growers and millers that information is received in appropriate form(s) and language(s) by relevant stakeholders. Information will include information on the RSPO mechanisms for stakeholder involvement, including information on their rights and responsibilities.

a. Does the company maintain a list of stakeholders? (E.g. listed by category and stakeholders listed should be site specific)

b. What is the frequency of updating the stakeholder list?

- Stakeholder list of PT Hari Sawit Jaya, updated 2 February 2016

- SOP AA-GL-5008.1-R1 dated 22 August 2011

- List information for stakeholder

The organization documented and maintained stakeholder list on document “Daftar Stakeholder PT Hari Sawit Jaya” updated on 2 February 2016. Stakeholder consists of governance agency, village chief, prominent figure, workers organization and third parties. Data and information will be update by SSL Officer (Public Relations) if there are changes but usually SSL officer review it every year. Information provided to public and stakeholder specified in social communication procedures AA-GL-5008.1-R1 – Communication

YES






COMPLIANCE (YES/NO)

c. Is there evidence of stakeholder verification?

d. What type of information is provided? (E.g. Environmental, social and legal)

e. What is the frequency and level of access to this information?

f. How and where is the information disseminated?

g. Who is responsible for providing & updating information?

h. Is there an SOP available to describe the process (of information sharing/dissemination)?

i. Are stakeholders aware of the type of information available and the procedures for accessing the information?

updated 5 March 2015

- Interview with stakeholder and field observation

and consultation procedure The Organization has determined the type of information that is available and accessible to all stakeholders. There are 13 types of information that is available to stakeholders :

- Number of employees and a list of basic wages of employees (village, sub-district, district Manpower and province, worker, worker union)

- NPWP (KPP) - Payment of local taxes/levies (Dispenda) - Document of EIA (BLH District and Province, KLH, NGOs) - Certificate of incorporation and its amendments, areal statement and

its production (Disbun District and Province, BPS, BPPT) - Evidence of land tenure (village, subdistrict, Disbun district and

province, BPN, NGOs) - Report of HCV identification (Village, BKSDA, BLH District and

province, NGOs) - Reports SIA identification (Village, BKSDA, BLH District and

province, NGOs) - Report of empowerment (Village, Subdistrict, District, Province,

NGOs) - Report of P2K3 (Manpower office district and province) - Document improvement program (Government agencies) - Document RSPO audit report (Village, Subdistrict, District, Province,

NGOs) - Document human rights policy (Village, Subdistrict, District, Province,

NGOs) All information above can be accessed by interested parties. Provision of information should be known by SSL Officer and approved by the General Manager. If the information is confidential trade must go through the approval of Regional Head Office. The relevant stakeholders received information on the RSPO mechanisms for stakeholder involvement, including information on their rights and responsibilities. All information provided in several stakeholders is in accordance with the terms and language used, for example in the form of reports and the contents of the report. Delivery of Information is delivered in Bahasa.






COMPLIANCE (YES/NO)

1.1.2 (M) Records of requests for information and responses to the information requested shall be available. Specific Guidance: For 1.1.2: Records of requests for information and responses are maintained for a period of time determined by the company, taking into account their importance and need.

a. Does the company have an SOP to ensure constructive response to stakeholders?

b. Who is the personnel in charge (PIC)?

c. Does the SOP cover the elements under 1.1.1?

d. Is there a clear time frame for response to request for information?

e. Are records of requests for information and responses maintained?

f. Are responses to requests for information timely and appropriate?


- Logbook Communication and Consultation Y2016

- Record of information request

and responses Y2016

Organization has established and implemented a mechanism for receiving and providing information in the procedure - SOP Penanganan Permintaan Informasi Stakeholder (Handling of Information Request from Stakeholder) SOP AA-GL-5008.1-R1 dated 22 August 2011 which explain the mechanism of response to requests for information by referring to the list of stakeholders and stakeholder information according to the principles and criteria for sustainable palm oil. The initial response was given no later than 14 days after receipt of the request from stakeholders. Personnel in Charge is KTU and SSL Officer.

All information except confidential commercial information or information which has a negative impact on the environment and social can be provided by the organization. Request for information outside of the list of public information should be approval of top management and the provision of information comes with an official receipt.

In the procedure also described specific timeframe to respond the requests for information from stakeholder depend on its request. Organizations usually respond directly to requests for information from all interest party/stakeholder.

All information requests from stakeholder and their respond were listed and recorded by Mill and Estate on logbook “Record of information request and responses”. Most of requests were an invitation to follow the event held by

YES






COMPLIANCE (YES/NO)

the stakeholders, for example: invitation for memorial of religious holidays, invitation for area meeting from Camat (Head of Subdistrict) and proposal for borrowing heavy machine like excavator, etc. Based on document review, all of them responded in accordance to procedure which is no later than 14 days.

However, organizations are routinely required to submit reports to the regulatory agencies, such as: Monthly Social Security, Report to the CTF return period PPh21, P2K3 Report (Office of Manpower and Transmigration), and Report of the implementation of the RKL / RPL (Environmental Agency of the district, the province and the Ministry of Environment, Land Application Report (LA). Organization (estate and Mill) monitor all of the information that is communicated to stakeholders routinely.

1.2 Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

1.2.1 (M) Publicly available documents shall include, but are not necessarily limited to: a. Land titles/user rights (Criterion 2.2) b. Occupational health and safety plans (Criterion 4.7) c. Plans and impact assessments relating to environmental and social impacts (Criteria 5.1, 6.1, 7.1 and 7.8) d. HCV documentation (Criteria 5.2 and 7.3) e. Pollution prevention and reduction plans (Criterion 5.6) f. Details of complaints and grievances (Criterion 6.3) g. Negotiation procedures (Criterion 6.4) h. Continual improvement plans (Criterion 8.1) i. Public summary of certification assessment report j. Human Rights Policy (Criterion 6.13).

Guidance: This concerns management documents relating to environmental, social and legal issues that are relevant to compliance with RSPO Criteria. Management documents will include monitoring reports. The auditors will comment on the adequacy of each of the documents listed in the public summary of the assessment report. Examples of commercially confidential information include financial data such as costs and income, and details relating to customers and/or suppliers. Data that affects personal privacy should also be confidential. One of legal requirements related to personal privacy is Act No. 14 year 2008 regarding Public Disclosure, clause 17 (h): Ongoing disputes (within or outside of a legal mechanism) can be considered as confidential information where disclosure could result in potential negative outcomes for all parties involved. On-going dispute (within or outside law mechanism) can be considered as confidential information if disclosure of information potentially causes negative impact to all related parties.






COMPLIANCE (YES/NO)

However, affected stakeholders and parties who are working towards resolutions should have access to relevant information. Examples of information where disclosure could result in potential negative environmental or social outcomes include information on sites of rare species where disclosure could increase the risk of hunting or capture for trade, or sacred sites which a community wishes to maintain as private. Growers and millers should ensure that sufficient objective evidence exists to demonstrate that the level of measuring and monitoring of the management plan, and information, is appropriate and made available.

a. How are the management documents listed in (c) below made publicly available?

b. Where are the documents placed?

c. Is the information provided adequate? Note: At minimum, an information summary of the document listed below should be made available.

Land titles/user rights (Criterion 2.2) - Legal boundaries ,land

use, classification, total area, grant title, permit validity , NCR rights,

Occupational health and safety plans (Criterion 4.7); - risk assessment and

mitigation, emergency response plan, training, accident records

Plans and impact assessments relating to environmental and social impacts (Criteria 5.1, 6.1, 7.1 and 7.8); - main social and

environmental impacts and mitigation measures,

HCV documentation (Criteria

- List information for stakeholder updated on 5 March 2015


- Site Permit (Izin Lokasi), - Land Use Title (HGU), - Plantation Operation Permit

(IUP), - Environmental and Environment

Impact Analysis document (AMDAL),

- Environmental management and monitoring report (RKL and RPL implementation reports),

- HCV Assessment report, - Social Impact Assessment (SIA)

Report, - Corporate Social Responsibility

(CSR) - Continuous Improvement Plan

Organisation documents that is generally available by the organisation. List of management documents are publicly available such as: Site Permit (Izin Lokasi), Land Use Title (HGU), Plantation Operation Permit (IUP), Environmental and Environment Impact Analysis document (AMDAL), environmental management and monitoring report (RKL and RPL implementation reports), HCV Assessment report, Social Impact Assessment (SIA) Report, Occupational Health and Safety Management Plan, Corporate Social Responsibility (CSR) and Continuous Improvement Plan Those documents were accessible and shown during this audit.

The documented procedure was established, it’s described the process and responsibilities and authorities in regards responding the request on information from the public. The coverage of request on information as stated in the procedure including information on legal documents, environmental documents, social activities documents, occupational health and safety programme documents and continual improvement documents.

All monitoring reports publicly available such as environmental management and monitoring report (RKL and RPL implementation reports), reports of P2K3 and etc.

YES






COMPLIANCE (YES/NO)

5.2 and 7.3); - identification on HCV

areas, maps, management and monitoring HCV

Pollution prevention and reduction plans (Criterion 5.6); - identification of pollutants,

management and reduction measures

Details of complaints and grievances (Criterion 6.3); - nature of complaints,

parties involved, status of case

Negotiation procedures (Criterion 6.4); - SOP, consultative, neutral,

inclusiveness, timeframe, responsibility

Continual improvement plans (Criterion 8.1); - for all elements under 8.1,

Public summary of certification assessment report; - follow RSPO format

Human Rights Policy (Criterion 6.13). - policy statement should

comply to the requirements of 6.13

d. Do the management documents contain monitoring plans and reports?

e. Are all monitoring reports publicly available?






COMPLIANCE (YES/NO)

1.31 Growers and millers commit to ethical conduct in all business operations and transactions. *1 New Criteria - Growers and millers commit to ethical conduct in all business operations and transactions.

1.3.1 There shall be a written policy committing to a code of ethical conduct and integrity in all operations and transactions along with the documentation of socialisation process of the policy to all levels of the workers and operations. Guidance: All levels of the operations will include contracted third parties (e.g those involved in security). The policy of ethical conduct and integrity should include: • A respect for fair conduct of business; • A prohibition of all forms of corruption, bribery and fraudulent use of funds and resources; • A proper disclosure of information in accordance with applicable regulations and accepted industry practices. The policy should be set within the framework of the UN Convention Against Corruption, in particular Article 12. Regulations that are related to eradication of corruption are as followings: 1. Act No. 7 year 2006 regarding Ratification of United Nations Convention Against Corruption 2. Act No.8 year 2010 regarding Prevention and Eradication of Money Laundry. 3. Act No. 13 year 1999 regarding Eradication of Corruption. 4. Presidential Instruction No.1 year 2013 regarding Action for Corruption Prevention and Eradication Normal business is the business that complies with all existing regulations. This written policy should be communicated to the affected parties.

a. Is there a written policy committing to a code of ethical conduct and integrity in all operations and transactions?

b. Does the policy include as a minimum:

A respect for fair conduct of business?

A prohibition of all forms of corruption, bribery and fraudulent use of funds and

- Policy Code of Ethic dated 1 December 2014

- Minutes and attendance dissemination of code of ethics policy in PT Hari Sawit Jaya

Written policy committing to a code of ethical conduct and integrity in all operations and transactions was available in “Company Policy” dated 1 December 2014 and signed by the Managing Director.

Ethic policy includes several aspects, such as:

- Social Responsibility - Wages - Fair conduct of business - Infrastructure and accommodation - Labour union - Child labour

YES






COMPLIANCE (YES/NO)

resources?

A proper disclosure of information in accordance with applicable regulations and accepted industry practices?

c. Is the policy documented and communicated to all levels of the workforce and operations, including contracted third parties? How is it communicated?

d. Are the documentation and communication done in the appropriate languages?

Note to auditor: The workforce should be interviewed to determine level of understanding of policy

- Indiscriminative treatment - Protection against sexual harassment and violence - Protection of reproductive rights - Receipts and provision of gifts, entertainment or assistance in job,

corruption and fraud - Relation with supplier - Occupational health and safety, and environment - Employee cooperatives - Human rights

The policy was well documented on 01 December 2014 and signed by the Management Director. The policy has been communicated to all levels of the workforce and operations, including contracted third parties. Dissemination of code of ethics policy has been carried out : a. KNU on 24 April 2016 to replanting contractor and on December 2016 to

all workers b. KAK on 11 Juy 2016 to local contractor and 19-20 March 2016 to

replanting contractor. To all workers on 5 and 12 March 2016 c. PND on 26 October 2016 to all workers, on 10 November 2016 to local

contractor (PT Surya Pratama Kreasindo) and 22 December 2016 to local contractor (PT Indomarine).



PRINCIPLE 2: COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS


CHECKLIST

OBSERVATIONS & OBJECTIVE EVIDENCE

SUMMARY OF FINDINGS FOR EACH INDICATOR

COMPLIANCE (YES/NO)

2.1 There is compliance with all applicable local, national and ratified international laws and regulations. Guidance: Implementing all legal requirements is an essential baseline requirement for all growers and millers whatever their location or size. Relevant legislation includes, but is not limited to: a. Land use period and right b. Labour c. Agricultural practices (e.g. chemical use) d. Environment (e.g. wildlife, pollution, environmental management and forestry) e. Storage f. Transportation and processing practices. It also includes laws made pursuant to a country’s obligations under international laws or conventions (e.g. the Convention on Biological Diversity (CBD), ILO core Conventions, UN Guiding Principles on Business and Human Rights). Furthermore, where countries have provisions to respect customary law, these will be taken into account. Key international laws and conventions are set out in Annex 1. Legal requirements are existing laws and regulations some of which are set out in Annex 1.

2.1.1 (M) Evidence of compliance with relevant legal requirements shall be available.

a. Is the complete list of legal requirements available? (Refer to relevant NIs or LIs for list of legal requirements)

b. Does the company have copies of the legal requirements?

Note to auditor: A due diligence on the company/area or management unit on legal compliance should be conducted prior to field audit. Any non-compliance should be verified during the field audit. Relevant legislation includes, but is not

Procedure AA-GL-5001.1-R0 (Compliance to regulations and its change)

Record of regulatory compliance evaluation called “ Evaluasi Kepatuhan Hukum PT Hari Sawit Jaya” updated on 10 October 2016

PHLwork attendance in KNU

PHL work attendance in

Relevant legal requirement legal were documented in “Regulations compliance evaluation form (Reviewed 2016). Updating of law and regulations change activities were well documented and update once a year as defined in Procedure AA-GL-5001.1-R0 (Compliance to regulations and its change). Last update was performed in 1 February 2016. Information on applicable legal and other requirements have been reviewed and summarised. Copies of the legal requirements were shown and maintained properly.

Evidence of compliance with applicable local, national and ratified international laws and regulations of Negeri Lama II Mill and Estate have been provided, including:

Land tenure and land use right : - Location permit,

YES (Major NCR 2016-01)

CLOSED




CHECKLIST



COMPLIANCE (YES/NO)

limited to: regulations governing land tenure and land-use rights, labour, agricultural practices (e.g. chemical use), environment (e.g. wildlife laws, pollution, environmental management and forestry laws), storage, transportation and processing practices. It also includes laws made pursuant to a country’s obligations under international laws or conventions (e.g. the Convention on Biological Diversity (CBD), ILO core Conventions and UN Guiding Principles on Business and Human Rights.

KAK

PHL work attendance in PND

- Izin Usaha Perkebunan (Plantation Business Permit) - Concession (HGU), please see criterion 2.2.1 major for details

Labour :

- SMK3 (OHS) implementation records, - OHS committee (P2K3), - freedom of worker union, - labour cooperation, - minimum wage (UMSK), - labour law, - employee social benefit, - BPJS Ketenagakerjaan (worker insurance) for employee, - medical check-up, - clinic operation permit, - Hyperkes certified doctor and paramedic, etc

Occupational Health and Safety:

- Heavy equipment operator (SIO) - First aider certified by Dinas NAKERTRANS - HIPERKES certified for paramedics and doctors - Boilers operator for mill - Electrical safety officer (K3 LIstrik) officer

The permit of equipment utilization were available at each units (estate and mill):

- Steam boiler units, inspection date May 2016 - 3 units of sterilizer at mill - Pressure vessels, such as: 2 units of compressor capacity s 120

litres at Negeri Lama Utara Estate and 160 litres at Aek Kuo Estate, 1 back pressure vessel at mill, motor diesel (genset) 3 units at mill capacity 400 Kw and 320 Kw, inspection date: June 2015. While 2 units at Aek Kuo Estate capacity 136 kva and 32.5 Kva and also 3 units at Negeri Lama Utara Estate capacity each




CHECKLIST



COMPLIANCE (YES/NO)

52 Kva, 135 Kva and 32.5 Kva 1 unit steam turbine capacity 1200 kw, inspection date May 2016

- Electricity installation approval of ministry of manpower at Negri Lama II Mill, inspection date May 2016

- Lifting equipment: 15 units Excavators capacity 500 Kg at mill and 1 unit excavator at Aek Kuo Estate

Agricultural practise : - System of plant cultivation of oil palm plantation, - Use of limited pesticides (paraquat),

Environment :

- Government regulation of the Environment No. 5/2014 - water quality standard, environmental impact analysis, etc.

- Government Regulation 101/2014 hazardous waste management, company has manage the waste properly (liquid, air and solid waste management)

- Government Regulation No.41/1999 re: Emission Control, Company has conducted air pollution control and emission control periodically in every six month at mill

- Periodic environmental parameter monitoring (stationary emission, ambient emission and ambient noise, moving source emission, waste water discharge quality, and ground water quality)

- list of protected flora and fauna, - management of protected area and protected flora and fauna

Conservation:

- President Decree No. 32/1990 regarding Management of protected areas complies by identifying areas comply with HCV in the estate and surrounding area, perform management and monitoring of HCV.

- Act No. 5/1990 regarding the conservation of natural resources and ecosystems, comply with managing HCV areas, create HCV




CHECKLIST



COMPLIANCE (YES/NO)

management and monitoring plan and performed it well, create procedures regarding HCV protection.

- IUNC Red List, CITES, HCV Toolkit, UU No. 32/2009, Act No. 41/1999, No. 5/1990, Act No. 9/1985, Act No. 11/1974, Government Regulation No. 7/1999, Government Regulation No. 35/1991, and President Degree No. 32/1990.

Status of compliance with laws and regulations were evaluated, and evaluation of compliance result indicated that compliance status was justified with reference to the objective evidence of compliance.

2.1.2 A documented system, which includes written information on legal requirements, shall be maintained.

a. Is there a document system which includes the following? - Personnel in charge to manage - Set of legal documents - Comprehensive list of

international, national, sub-national and provincial laws which details the requirements of specific to the mill and estate operations.

- Relevant sections within the law that is identified and linked to activities

b. Are the documents available to all levels of management?

SOP AA-GL-5001.1-R0 – Compliance Laws Procedure.

A documented system which includes written information on legal requirements was maintained. It was documented in SOP AA-GL-5001.1-R0 - Compliance Laws Procedure. The procedure described that identification and evaluation performed against regulation and requirement regarding environment, OHS, plantation, labour, social, etc. the updating of legal regulation performed once a year in January, while evaluation of compliance with legal regulation performed is once per year; personnel in charge to manage the updating and evaluation which is sustainability division together with estate personnel in each section. This document was available to all staff and all level management, the document was store at central office.

YES

2.1.3 A mechanism for ensuring compliance shall be implemented.

a. Is an internal audit for legal compliance conducted annually and documented?

List Of Attendances – Corrective Action ISPO RSPO

RSPO Internal Audit April

Mechanism for ensuring compliance has been implemented and documented in SOP AA-GL-5001.1-R0 – Compliance Laws Procedure. The audit checklist covered the implementation of the all applied regulations. Status of compliance with the applicable environment, OHS, plantation, labour, social laws and regulations were evaluated, and evaluation of

YES




CHECKLIST



COMPLIANCE (YES/NO)

2016

Check list and corrective action audit internal year 2016.

compliance result indicated that compliance status was justified with reference to the objective evidence of compliance.

Internal audit related to legal compliance has been performed by Sustainability Departement. Last internal audit was conducted on April 2016. Report of audit result was sighted and well documented.

2.1.4 A system for tracking any changes in the law shall be available and implemented. Specific Guidance: For 2.1.4: The systems used for tracking any changes in laws and regulations should be appropriate to the scale of the organisation.

a. Is there a documented methodology (e.g.: personnel in charge (PIC), source of info, frequency of update) for tracking changes and communication of changes to relevant sections of the legislation?

Procedure.AA-GL-5001.1-R0 (Compliance to regulations and its change)

Procedure (AA-EMS-432-PR) Law regulation and other requirements

Procedure (AA-EMS-452-PR) Compliance evaluation List of regulations compliance evaluation form (AA-4320002a-LT) Review period 2015

The SPO officer in charge was responsible to identified and updated the regulation applicable to the organisation, also to socialize to related functions. Update and reviewed was conducted periodically once within a year.

YES

2.2 The right to use the land is demonstrated, and is not legitimately contested by local people who can demonstrate that they have legal, customary or user rights. Guidance: The company has SOP for Land Acquisition to ensure that there is no removal of legal, customary or user rights (see 6.4.1 & 6.4.2) Descriptions of those rights are as follows:

a. Legal Right may be in the form of Land Certificates (Ownership Right / Hak Milik, User Right /Hak Guna Usaha), Registration Letter / Surat Keterangan Terdaftar, Letter of Inheritor Right / Surat Keterangan Hak Waris, and or Letter of Girik Right/Surat Keterangan Hak Girik.

b. Customary Right in the Local Regulation/Perda (based on Constitution Court Decision No. 35/PUU-X/2012 regarding Customary Forest) determined through participatory mapping of customary land by the legitimate customary law community who are recognized by the surrounding customary law community and refers to Regulation of the Minister of Home Affairs (Permendagri) No. 52 year 2014 regarding Guideline of Recognition and Protection of Customary Law Community and Regulation of the State Minister of Agrarian Affairs/Head of National Land Agency (BPN) No. 5 year 1999 regarding Guidelines for the Settlement of Problems Related to the Communal Reserved Land of the Customary Law Abiding Community.




CHECKLIST



COMPLIANCE (YES/NO)

c. User Right may be in the form of evidence of land leasing from the legal right holder, and/or official letter from the Village Head based upon testimony of communities or individual where their areas are adjacent to that land.

Customary area is customary land, including soil, water and or waters and natural resources with certain boundaries, owned, utilized and preserved for generations and on sustainable basis to fulfill the needs of their livelihood that was acquired from their ancestor or claimed ownership of communal land or customary forest.

Where there is a conflict on the condition of land use as per land title, growers should show evidence that necessary actions have been taken to resolve the conflict with relevant parties

A mechanism should be in place to resolve any conflict (Criteria 6.3 and 6.4).

Where operations overlap with other rights holders, companies should resolve the issue with the appropriate authorities, consistent with Criteria 6.3 and 6.4.

Historical data of land ownership should be provided by the company for a minimum of one period of ownership/control.

If there is a claim on customary right, this shall be legally demonstrated.

2.2.1 (M) Documents showing legal ownership or lease, history of land tenure and the actual legal use of the land shall be available. Specific Guidance: For 2.2.1: The documents required to demonstrate legal ownership, lease or control and use of land shall include those related to getting the land permit or transfer of land right and up to the operational right.

a. Are there documents showing legal ownership or lease of the land available? (e.g. land titles, lease documents)

b. Are there documents showing history of land tenure available? (e.g. legal documents showing land status change, SIA and EIA reports, HCV assessment reports)

c. Are there documents showing the actual legal use of the land available?

d. Are the documents complete?

SK HGU certificate no. 01 and Keputusan Menteri Dalam Negeri no. 02/HGU/1988, dated 9 February 1988, covering: 11,777.08 Ha.

SK HGU certificate no.2, 1997 and Decree of the Minister of Agrarian Affairs / Head of National Land Agency, dated 27 January 1997, no.12/HGU/BPN/97; covering 2,087.91 ha. SK HGU certificate no.3, and SK BPN Sumatera Utara

The total area coverage for all land titles (HGU) were resumed 14,053.74 Ha, as details: 11,777.08 Ha For HSJ Negeri Lama (+) 2,087.91 ha for Aek Kuo (+) 188.75 Ha for extension.

The completes legal documents showing history of land tenure includes the actual legal use were available as below:

Land title HGU; certificate no. 01 and Keputusan Menteri Dalam Negeri no. 02/HGU/1988, dated 9 February 1988, covering: 11,777.08 Ha.

Land tittle HGU; certificate no.2 year 1997, letter of measurement no. 2348/1997, and Special Situation Map no. 57/12/IV/1996, covering: 2,087.91 Ha.

Land titles HGU Extension No.02-12-00-00-2-00074 issued on 29 February 2016, letter of measurement dated 12 February 2016 No.516/Labuhan-batu/2016, and SK BPN Sumatera Utara No.3/HGU/BPN.12/XI/2015 dated 8 December 2015 regarding

YES




CHECKLIST



COMPLIANCE (YES/NO)

No.3/HGU/BPN.12/XI/2015 dated 8 December 2015 regarding extension land titles issues for PT Hari Sawit Jaya for area coverage 188.75 Ha

extension land titles issues for PT Hari Sawit Jaya for area coverage 188.75 Ha

IUP-B (Izin usaha perkebunan Budidaya) No. 180/293/Huk/2014 dated 3rd December 2014 from Labuhan Batu Regent for coverage area extension 190.96 Ha

Plantation Operation Permit SPUP (Surat Pendaftaran Usaha Perkebunan) No.HK.350/410/DJ.Bun.5/V/2001 dated 28th May 2001, capacity 45 ton FFB/hr. area wide 11.777, 08 Ha

Site Permit/Izin Lokasi from Labuhan Batu Regent No.503.593/259/ptnh/2013 dated 03rd September 2013 for area usage ± 190.96 Ha at Desa Sidomulyo village, Bilah Hilir District, Labuhan Batu Regent, North Sumatera Province

Site Permit (Izin Lokasi) issued as indicated in Decree of the Governor of North Sumatera #593/9/K/BKPMD/Tahun 1987 dated 4th May 1987, covering an area of 11,000 hectares for village of Selat Besar, Tanjung Halaban, Sei Tampang and Village of Kuala Bangka, Subdistrict Kuala Hilir

Approval letter investor (Surat persetujuan tetap penanaman modal Dalam Negri )No.145/I/PMDN/1980

Business extension Izin usaha perluasan No.9/1/IU/II/PMDN/Industri/2011 dated 15 Mar 2011. IUT 66040 in toi 79540 ton CPO

Registered company / Tanda Daftar perusahaan (TDP) No.020610100219 dated 17th June 2014 valid for 5 years

The organisation has already followed up the previous audit findings regarding plantation area outside the HGU/land title certificates, the additional land tittle/HGU as listed, covering area 188.75 Ha. Moreover there are also available the “Izin Lokasi” and IUP-B for coverage area 190.96 Ha.

2.2.2 Legal boundaries are demonstrated clearly and maintained. Specific Guidance:




CHECKLIST



COMPLIANCE (YES/NO)

For 2.2.2: Grower should cease operations on land planted beyond the legally determined area and there should be specific plans in place to address such issues for associated smallholders.

a. Is there a legal map showing location of boundary markers?

b. Is there physical presence of boundary markers?

c. Is there an SOP for boundary demarcation and maintenance?

Note to auditor: Ground verification of boundary markers using GPS should be conducted. Priority should be on boundaries with other estates, community areas, protected area and rivers In the case of Associated Smallholders: d. Are there documents showing that the

boundaries of associated smallholders have been recorded and verified by the mill?

e. In case of boundary breach, is there proof of a mitigation plan being implemented?

Situation Map / HGU map

Site visit observation on KNU and KAK Estate

Working instruction (NLG-WI-001/Rev.0/01-12-15) Monitoring and Maintenance of boundary markers

Laporan Pemeriksaan dan Perawatan Patok Batas (Report of Pegs monitoring and maintenance, dated 10 May 2016.

Area has been measured by government BPN and recorded on Situation Map / HGU map. Documented working instruction (NLG-WI-001/Rev.0/01-12-15) regarding the monitoring and maintenance of boundary markers was established. Within the procedure was defined that maintenance conducted twice within a year. Legal boundaries marker were sighted during audit visit and maintained along the perimeters of estate lands which were mapped with Global Positioning System (GPS). Field observation was conducted to pegs number as below:

Negri Lama Utara (KNU) Estate

Peg no.31 with coordinates N: 02 ° 28' 29.1”; E: 099° 58' 58.7” at Block A98a Afdeling 1, bordering with Kampung Tangkahan Manggis

Peg no.30 with coordinates N: 02 ° 28' 30.4”; E: 100° 01' 20.3” at Block B11f Afdeling 2, bordering with Kampung Baru.

Aek Kuo (KAK) Estate

Peg no.41 with coordinates N: 02 ° 23' 59.1”; E: 099° 56' 12.9” at Block C03e Afdeling 3, bordering with Kampung Aek Kuo

NO (Minor NCR 2016-02)

OPEN

2.2.3 In the event that there is a dispute or a dispute has occurred, adequate evidence of legitimate acquisition and compensation or compensation settlement process through conflict resolution which has been received through Free, Prior and Informed Consent by all related parties shall be provided.




CHECKLIST



COMPLIANCE (YES/NO)

a. Are there, or have there been any land disputes?

Note to auditor: Due diligence should be conducted on the management to provide evidence that there has been no historical or current land dispute

b. If there are or have been disputes, are

there: - Documents to proof legal

acquisition? - Records of FPIC process?

c. If there has been acquisition involving compensation, are there: - Records that Fair compensation

has been provided and accepted by parties involved?

- Records that all affected parties are consulted and represented?

- Documents of negotiations/discussion available?

Note to auditor: There should be direct verification of above with the affected parties

• Public consultation with stakeholders on 22 December 2016

• SOP: Social Conflict and Land Dispute Resolution has been described in AA-GL-0052.1-R1.

No complaints associated with land disputes between the company and the surrounding community. This was also confirmed during the public consultation with stakeholders on 22 December 2016.

PT. Hari Sawit Jaya has established a mechanism for resolution of conflicts and disputes through SOP for Social Conflict and Land Dispute Resolution has been described in AA-GL-0052.1-R1.

This procedure mentioned how the company solves the problem if any conflict occurred, both internal and external conflicts. This procedure also mentioned if the problem cannot be resolved by negotiation, the company will take legal action involving the related institution.

N/A

2.2.4 (M) There shall be an absence of significant land conflict, unless requirements for acceptable conflict resolution processes (see Criteria 6.3 and 6.4) are implemented and accepted by the parties involved.




CHECKLIST



COMPLIANCE (YES/NO)

a. Does the company have cases of significant land conflict? (i.e. preventing the company from operating normally)

b. If the company has cases of conflict, are records of the following available? - Status of conflict - SOP/ mechanism for conflict

resolution - Implementation of

SOP/mechanism - Acceptance of the procedures by

all parties - Records of conflict resolution






Based on interview with stakeholder, this procedure was socialized to them and they accept it.

N/A

2.2.5 For any conflict or dispute over the land, the evidence of the extent of disputed area is mapped out in a participatory way with involvement of affected parties (including neighboring communities and local government where applicable), shall be available.

a. Is there an SOP for participatory mapping of disputed area?

b. Is a dispute map available?

c. Is there documented evidence of involvement and acceptance by the affected parties?

Note to auditor: Actual ground verification showing the accuracy of the dispute map should be conducted






N/A




CHECKLIST



COMPLIANCE (YES/NO)

2.2.6 (M) To avoid escalation of conflict, there shall be no evidence that palm oil operations have instigated violence in maintaining peace and order in their current and planned operations. Specific Guidance: For 2.2.6: The company policy should require the use only of legally recognized private security personnel in their operations and prohibit extra-judicial interference and intimidation by the security personnel as mentioned above (see Criterion 6.13).

a. Does the company have a policy to circumvent instigated violence to maintain peace and order in current and planned operations?

b. Is there any evidence of: - The use of confrontation and

intimidation by the company to maintain peace and order?

- Use of para-militaries and mercenaries in the plantation?

• Company policy.


Company have a policy to circumvent instigated violence to maintain peace and order in current and planned operations. It documented in the Company Policy dated 1 December 2014 and mentioned in the item no 8 and stated circumvent instigated violence to maintain peace and order in current and planned.

From the results of the public consultation with stakeholder on 22 December 2016 also confirmed that no act of violence and militaristic ways adopted by the company in solving problems with public / stakeholders.

YES

2.3 Use of the land for oil palm does not diminish the legal, customary or user rights of other users without their free, prior and informed consent. Guidance: All indicators are applied to all oil palm plantations developed after November 2005, with exception to plantations developed prior to November 2005 that may not have records dating back to the time of decision making, in particular for compliance with Indicators 2.3.1 and 2.3.2.

Where there are legal or customary rights over land, the grower should demonstrate that these rights are understood and are not being threatened or reduced. This Criterion should be considered in conjunction with Criteria 6.4, 7.5 and 7.6. Where customary rights areas are unclear these should be established through participatory mapping exercises involving affected parties (including neighbouring communities and local authorities).

This Criterion allows for sales and negotiated agreements to compensate other users for lost benefits and/or relinquished rights. Negotiated agreements should be non-coercive and entered into voluntarily, carried out prior to new investments or operations, and based on an open sharing of all relevant information. The representation of communities should be transparent and in open communication with other community members. Adequate time should be given for customary decision making and iterative negotiations allowed for, where requested. Negotiated agreements should be binding on all parties and enforceable in the courts. Establishing certainty in land negotiations is of long-term benefit for all parties.

Growers and millers should refer to the RSPO approved FPIC guidance (RSPO endorsed Free, Prior and Informed Consent Guide for RSPO Members, November 2015).

Companies should be especially careful where they are offered lands acquired from the State by its invoking the national interest (also known as ‘eminent domain’).




CHECKLIST



COMPLIANCE (YES/NO)

2.3.1 (M) Maps of an appropriate scale showing the extent of recognised legal, customary or user rights (Criteria 2.2, 7.5 and 7.6) shall be developed through participatory mapping involving affected parties (including neighbouring communities where applicable, and relevant authorities).

a. Does the company have an SOP on FPIC?

b. Is there evidence that the identification of legal, customary or user rights has been done through FPIC process?

c. Is there evidence that the FPIC process has been implemented in accordance to the company SOP? Where is this evidence recorded? (E.g.: Documents, Minutes of meeting, Records, Agreements, Maps etc.)

d. Is there a map of the extent of legal, customary or user rights? Is this map of appropriate scale (1: 10,000)?

e. Was the map produced through participatory mapping with reference to SIA and HCV assessment?

f. Does the map have a title, legend, source, scale and projections/georeference?

g. Are the maps accepted by the relevant communities?

• SOP Penanganan Konflik Lahan (Conflict Management and Handling) AA-GL-5003.1-R2 dated 5 May 2015.

• Areal Statement of PT Hari Sawit Jaya


Company has established SOP Penanganan Konflik Lahan (Conflict Management and Handling) AA-GL-5003.1-R2 dated 5 May 2015 which stated the mechanism of FPIC.

However FPIC process was not applicable due to all land in inside the concession area has been developed in period 1993 - 2003 (based on areal statement). Based on Social Impact Assessment, HCV Assessment and public consultation there were no customary rights in the land.

YES

2.3.2 Copies of negotiated agreements including the process of free, prior and informed consent (FPIC) (Criteria 2.2, 7.5 and 7.6) shall be available and these include: a. Evidence of consultation b. Statement of transfer of rights c. Evidence of compensation

See specific guidance 2.3.2




CHECKLIST



COMPLIANCE (YES/NO)

Specific Guidance: For 2.3.2 : Copies of negotiated agreements shall include at minimum:

a. A plan that should be developed through consultation and discussion with all affected groups in the communities, and that information has been provided to all affected groups, including information on the steps that shall be taken to involve them in decision making;

b. Evidence that the company has respected communities’ decisions to give or withhold their consent to the operation at the time that this decision was taken; c. Evidence that the company has ensured that affected communities have understood and accepted the legal, economic, environmental and social implications for permitting

operations on their land, including the implications for the legal status of their land at the expiry of the company’s title or concession. The company shall inform the legal implication based upon, but not limited to, Act No. 50 year 1960 and Government Regulation No. 40 year 1996 regarding Land-Use Right (HGU), Building-Use Right (HGB), and User Right, where the land will be owned by the state if HGU right is expired, not be extended and or updated.

d. Evidence that the company has informed the plan for partnership program.

a. Are copies of negotiated agreements with affected parties available?

b. Is there evidence that the agreement is prepared through proper FPIC process?

c. Does the agreement contain the following: - An action plan developed through

consultation with affected parties, is inclusive and evidence that members of affected parties are well informed and involved in the decision making process

- Evidence of options to give or withhold consent for development

- Evidence that members of the affected communities understand and accept the implication involved in permitting/rejecting oil palm development on their land

• SOP Penanganan Konflik Lahan (Conflict Management and Handling) AA-GL-5003.1-R2 dated 5 May 2015.

• Areal Statement of PT Hari Sawit Jaya


Organizations have established procedures SOP Penanganan Konflik Lahan (Conflict Management and Handling) AA-GL-5003.1-R2 dated 5 May 2015. Describes the mechanism of land conflict resolution mechanisms between companies and land owners. The land cleared for oil palm plantations should ensure not be a problem and there is no dispute over land ownership. Procedure was presented to the head of the village around the plantation. Procedure for FPIC process was available, and during public consultation with Villages Heads, it was confirmed that the procedure was made in consultation and discussion with them. The procedure was consulted with surrounding communities around the area of company. There are no customary or user right in the plantation. It has been verified during group discussion with villages head, community leader and young leader around estate.

The results of the consultation can be seen that the legal implications, economic, and social environment so that the use of land for plantation development has been understood and accepted by the affected communities, including the implications for the legal status of their land, concessions or compensation for their land.

N/A




CHECKLIST



COMPLIANCE (YES/NO)

(E.g.: legal status, social, environmental, economic)

- Evidence that the negotiated agreement was entered voluntarily without coercion by all parties

- Evidence that adequate time was given for customary decision making and iterative negotiations

- Clause which states that the negotiated agreement is legally binding

2.3.3 Relevant information shall be available in appropriate forms and languages, including analysis of impacts, proposed benefit sharing, and legal arrangements.

a. Is there evidence that all the information (maps, agreement, records, impact assessment, benefit sharing and legal arrangements) is available in appropriate forms and languages, understood and accessible to affected parties?

Note to auditor: this should be cross checked to a sample of the affected parties

Interview with local governance and stakeholder on 22 December 2016

Before performing land clearing, the company ensures that all of lands that will be cultivated have a clear status. The company has a land map according to the location permit given by the government. If there was land that become around community ownership within the area of location permit, companies will freeze the land with compensation as agreed both parties. There is no element of coercion and violence that performed by companies. This was also confirmed when the public consultation on 22 December 2016 with community leaders, prominent figure and local governance. Planted areas of the Estate are wholly on Government land, leased under HGU. Maps have been developed for each estate indicating Legal demarcation and planted areas. Currently organizations have established procedures SOP SOP Penanganan Konflik Lahan (Conflict Management and Handling) AA-GL-5003.1-R2 dated 5 May 2015. Describes the mechanism of land conflict resolution mechanisms between companies and land owners. The land cleared for oil palm plantations should ensure not be a problem and there is no dispute over land ownership. Procedure was presented to the head of the village around the plantation

NA




CHECKLIST



COMPLIANCE (YES/NO)

2.3.4 (M) Evidence shall be available to show that communities are represented through institutions or representatives of their own choosing, including legal counsel. Specific Guidance: For 2.3.4: Evidence of proxy letter from the community group, individual and/or company to the institution which represents community at the negotiation process, shall be demonstrated.

a. Who is the representative of the community in the negotiation process?

b. Is the representative accepted by the community?

c. Is the record of appointment to represent the community available and shared with other parties?

Interview with local governance and stakeholder on 22 December 2016

HCV and SIA Assessmnet

Communities are represented through institutions or representatives of their own choosing. It was confirmed that Village communities have delegated their representatives to the Village Head. Village Head are selected through local election and accepted by the community. FPIC process was not applicable due to all land in inside the concession area has been developed in period 1993 - 2003. Based on Social Impact Assessment, HCV Assessment and public consultation there were no customary rights in the land.

NA



PRINCIPLE 3: COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY




COMPLIANCE (YES/NO)

3.1 There is an implemented management plan that aims to achieve long-term economic and financial viability. Guidance: Whilst it is recognised that long-term profitability is also affected by factors outside their direct control, top management should be able to demonstrate attention to economic and financial viability through long-term management planning. There should be longer term planning for plantations on peat, particularly in regards to subsidence and flooding issues (see Indicator 4.3.5).

Consideration of smallholders should be inherent in all management planning where applicable (see also Criteria 6.10 and 6.11). For scheme smallholders, the company should refer to RSPO Guidance On Scheme Smallholders, July 2009 or endorsed final revision.

Growers should have a system to improve practices in line with new information and techniques. For smallholder schemes, the scheme management should be expected to provide their members with information on significant improvements.

This Criterion is not applicable to independent smallholders (refer to RSPO Guidance for Independent Smallholders under Group Certification, June 2010)

3.1.1 (M) A documented management plan, a minimum of three years shall be available, including, where appropriate, plan for scheme smallholders. Specific Guidance: For 3.1.1: The business or management plan should contain: • Attention to quality of planting materials; • Crop projection = Fresh Fruit Bunches (FFB) yield trends; • Mill extraction rates = Oil Extraction Rate (OER) trends; • Cost of Production = cost per tonne of Crude Palm Oil (CPO) trends; • Forecast prices; • Financial indicators. Suggested calculation: trends in 3-year running mean over the last decade (FFB trends may need to allow for low yield during major replanting programmes).

a. Does the company have a documented business or management plan with a minimum planning period of 3 years?

b. Does it include the following: - Land area statement

(planting years, non-planted areas, i.e. HCV,

PT. Hari Sawit Jaya – Negri Lama II Projection year 2015 – 2022

PT. Hari Sawit Jaya – Negri Lama Selatan, Negri Lama Central, Negri Lama Utara and Aek Kuo Estate Operation Projection year 2015 - 2022

Management plan established for period 2015 - 2022 has been used to achieve economic viability and long-term financial. The plan was approved by the top management. The Management Plan has include: - Land area statement (planting years, non-planted areas, i.e. HCV,

conservation areas, fragile soils, enclaves) with updated location maps. Maps does have title, legend, source, scale and projections/georeferenced

- Plan for management of scheme smallholders (where appropriate) - Quality of planting materials - Crop projection = Fresh Fruit Bunches (FFB) yield trends

YES (Major NCR

2016-04) CLOSED






COMPLIANCE (YES/NO)

conservation areas, fragile soils, enclaves) with updated location maps. Maps should have title, legend, source, scale and projections/georeferenced

- Plan for management of scheme smallholders (where appropriate)

- Quality of planting materials - Crop projection = Fresh Fruit

Bunches (FFB) yield trends - Mill extraction rates = Oil

Extraction Rate (OER) trends

- Cost of Production = cost per tonne of Crude Palm Oil (CPO) trends

- Forecast prices - Financial indicators –

profitability forecast (income vs cost)

- Projected expansion (area, mill capacity, infrastructure, social amenities)

- General strategy and allocation for environmental and social management (refer to P5, P6 and P8)

c. Is this management document subjected to an annual review?

d. For plantations on peat, is there a long term viability plan – e.g. flooding, drainability assessments and subsidence issues? (see

- Mill extraction rates = Oil Extraction Rate (OER) trends - Cost of Production = cost per tonne of Crude Palm Oil (CPO) trends - Forecast prices - Financial indicators – profitability forecast (income vs cost) - Projected expansion (area, mill capacity, infrastructure, social amenities) - General strategy and allocation for environmental and social management

(refer to P5, P6 and P8)

The parameters listed in the management plan that includes revenue and earnings, projected crop production (FFB yield trend), the extraction rate of CPO and PK (Production forecast up to 2021), harvesting, processing FFB and CPO. The achievement of the management plan is reviewed every month in the Estate Unit Report (LUK) and Mill Unit Report (LUP) according to the current month. Reviewing of LUK and LUP was conducted monthly. Planting material are 70% Topaz, 10% Socfin, 10% Dami Mas and 10% Lonsum.

For plantations on peat, there is a long term viability plan – e.g. flooding and subsidence issues. Water canal and water gate has been established, and subsidence monitoring has been performed.

The organisation has a system to improve practices in line with new information and techniques through continual improvement. PIC for estate is each Estate Manger, and PIC for Mill is Mill Manager. New information and new techniques are update through regular management review meeting. All staffs can propose continual improvement. Continual improvement was communicated to all unit managements.






COMPLIANCE (YES/NO)

4.3.5)

e. Does the grower have a system to improve practices in line with new information and techniques? - Has the personnel in charge

(PIC) been identified? - How is the information

updated? - Is there a documented SOP

which requires monitoring and updating information to improve practices?

- Is new information communicated to workers and scheme smallholders (where appropriate)? How is it communicated?

3.1.2 An annual replanting programme projected for a minimum of five years (but longer where necessary to reflect the management of fragile soils, see Criterion 4.3), with yearly review, shall be available.

a. Is there an annual replanting programme projected for a minimum of five years?

b. Has it been documented?

c. Is the progress of implementation documented?

d. How does the programme take into consideration fragile soils such as peat? Is there a longer projection period (see C4.3)?

e. Is there evidence of a yearly review of the replanting programme?

Replanting program of PT. Hari Sawit Jaya

LUK (Estate Unit Report)

Projected annual replanting programme was described in the “Replanting Program of PT. Hari Sawit Jaya”. Detail Annual Replanting Programme for 2015 – 2023 has been documented. The progress of implementation (realisation) has been documented in monthly LUK (Estate Unit Report).

Year

Program (Ha) Realisation (Ha)

KNS KNC KNU KAK Total KNS KNC KNU KAK Total

2010 1116 822 0 0 1938 1116 822 0 0 1938

2011 1465 625 552 0 2642 1465 625 552 0 2642

2012 743 1689 214 0 2646 743 1689 214 0 2646

2013 1057 0 452 50 1559 1057 0 452 50 1559

2014 0 0 838 547 1385 0 0 838 547 1385

2015 99 691 431 1221 99 0 691 431 1221

2016 0 0 669 565 1234 0 0 669 565 1234

YES (Major NCR

2016-04) CLOSED






COMPLIANCE (YES/NO)

2017 0 0 480 132 612 0 0 0 0 0

Fragile soils such as peat have taken into consideration on the replanting programme of PT. Hari Sawit Jaya. Longer projection period is applied. The replanting program is reviewed annually in regular management review meeting.



PRINCIPLES 4: USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS




COMPLIANCE (YES/NO)

4.1

Operating procedures are appropriately documented, consistently implemented and monitored. Specific Guidance: For 4.1.1 and 4.1.4: SOPs and documentations for mills should include relevant supply chain requirements (see RSPO Supply Chain Certification Standard, Nov 2011).

Mechanisms to check implementations could include documentation management systems and internal control procedures.

These procedures refer to the Best Management Practices for Oil Palm in Indonesia, such as Technical Guideline for Oil Palm Development, Directorate General of Estate Crops, Ministry of Agriculture, 2006.

4.1.1 (M) Standard Operating Procedures (SOPs) for estates (land clearing to harvesting) and SOP for mills (reception of FFB to dispatch of CPO and PKO) shall be available.

a. Have the SOPs for mills and plantation been documented?

b. Does the SOP cover key processes, harvesting, transportation, manuring, IPM, GAP, Supply Chain requirements for the mill, etc.?

c. Is a copy of the SOP available on site and is it documented in an appropriate language?

d. Is there evidence that SOPs are implemented and understood by workers?

e. Are the SOPs appropriate and adequately cover all estate and mill processes and activities?

f. How are the SOPs made available at the point of use?

Agriculture Policy Manual (APM)

Mill Policy Manual (MPM)

Records of APM and MPM dissemination dated 02-September-2015

Laporan Unit Kebun (Estate Operation Report) December 2015

Mill operation summary (MOS) period December 2015

The documented Standard Operating Procedures (SOP) for Estate was evident:

AA-APM-OP-1100.01-R1 Nursery

AA-APM-OP-1100.02-R1 Land Preparation

AA-APM-OP-1100.03-R1 Creation and Maintenance of Road

AA-APM-OP-1100.04-R1 Creation and Maintenance Trenches

AA-APM-OP-1100.05-R1 Soil and Water Conservation

AA-APM-OP-1100.06-R1 Planting Leguminous Cover Crop

AA-APM-OP-1100.07-R1 Oil Palm Planting

AA-APM-OP-1100.09-R1 Manuring

SOPs for IPM: o AA-APM-OP-1100.10-R1 Pest & Diseases Control o AA-APM-OP-1100.08-R1 Weeding Control o AA-APM-OP-1100.14-R1 Census and Identification Plant

AA-APM-OP-1100.11-R1 Management Pesticides

AA-APM-OP-1100.12-R1 Castration

AA-APM-OP-1100.13-R1 Pruning

AA-APM-OP-1100.15-R1 Census of Production

AA-APM-OP-1100.16-R1 Consolidation

AA-APM-OP-1100.17-R0 Water Management

AA-APM-OP-1100.18-R1 FFB Harvesting

AA-APM-OP-1100.19-R1 Transportation Management

Yes






COMPLIANCE (YES/NO)

AA-APM-OP-1100.20-R1 Replanting The documented procedures regarding processing activities of palm oil have already described within the “Mill Policy Manual” (MPM) document which approved by Operations Director. The manual are consist of each processing station start from FFB (Fresh Fruit Bunch) receiver until the CPO delivery and also include the procedures of machineries preventive maintenance, utilities and quality control. Herewith the procedures consists within the MPM such as:

AA-MPM-OP-1400.02-R2 FFB Receiver Procedure

AA-MPM-OP-1400.03-R1 Sterilizer station Procedure

AA-MPM-OP-1400.04-R1 Threshing station Procedure

AA-MPM-OP-1400.05-R1 Digesting and Screw Press station Procedure

AA-MPM-OP-1400.06-R1 Clarifier station Procedure

AA-MPM-OP-1400.07-R1 Nut Polishing Procedure

AA-MPM-OP-1400.08-R1 Kernel station Procedure

AA-MPM-OP-1400.11-R1 Water Treatment Procedure

AA-MPM-OP-1400.12-R1 Laboratory Procedure

AA-MPM-OP-1400.14-R2 Storage and delivery Procedure

AA-MPM-OP-1400.15-R1 Preventive machineries maintenance Procedure

AA-MPM-OP-14000.13-R1 – WWTP Process

AA-MPM-OP-1400.17-R3 Traceability

AA-MPM-OP-1400.18-R3 Mass Balance Copy of the procedures was available on site and is it documented in Indonesian language. Procedures were distributed to Estate and Mill. Procedure has been disseminated periodically to all Estate and Mill employees through regular training and morning briefing. Interviews with the employees indicated satisfactory level of understanding and implementation in relation to their respective job function. The SOPs were appropriate and adequately cover all estate processes and activities and were available at the point of use. Based on field observation at estate and mill it was demonstrated that SOPs are implemented and understood by workers.






COMPLIANCE (YES/NO)

4.1.2 Checking or monitoring of operations procedures is conducted at least once a year.

a. Is there a master list of all SOPs?

b. How does the company keep track of revisions?

c. Is there mechanism for: - Translation of SOP into work

instructions in appropriate languages?

- Records of training for all levels?

- Internal control (e.g. audit and review, field inspection) procedure in place to monitor consistent implementation of SOPs?

- Trained and competent personnel assigned to carry out internal control activities?

- Implementation audits to be carried out regularly covering implementation of all the SOPs?

- Procedure to address non-compliance and corrective action for continuous improvement?

Agriculture Policy Manual (APM)

Mill Policy Manual (MPM)

VA (Visit Agronomy) Report KAK/VA/FULL02-16 for visit date 19 to 24 September 2016.

VA (Visit Agronomy) Report KNU/VA/FULL02-16 for visit date 9 to 15 October 2016.

VE (Visit Engineering) Report. No. PND-VE-FULL-02-16 dated 18 September 2016

The master list of mill documents (include procedures and work instruction) were compiled within 1 bundled documents named “APM” (Agriculture Policy Manual) for Estate and “MPM” (Mill Policy Manual) for Mill. The updated procedures were received from head office sustainable department sent to all mill related functions. The APM and MPM Documents were available on Bahasa Indonesia language and disseminated by head office sustainable department, records of dissemination was evident dated 02-September-2015. The internal control for plantation (Visit Agronomy) was conducted by experienced Agronomy Consultant, namely Mr. Ngu Herng Shiow regarding all operation process in agronomy, last visit conducted on 19 to 24 September 2016 in KAK and 9 to 15 October in KNU. Internal control for Mill resulted in Visit Engineering Report regarding CPO inter-laboratory crosscheck using statistical method to compare the quality of CPO for each mill, records was sighted that the result shown there is no big issues in PND (Negri Lama 2 Mill) and its supply bases. The company has keep track of revisions. The documented mechanism has include:

- Translation of SOP into work instructions in appropriate languages. - Records of training for all levels. - Internal control (e.g. audit and review, field inspection) procedure in

place to monitor consistent implementation of SOPs. - Trained and competent personnel assigned to carry out internal

control activities. - Implementation audits to be carried out regularly covering

implementation of all the SOPs. - Procedure to address non-compliance and corrective action for

continuous improvement.

Yes

4.1.3 Records of monitoring and any follow-up actions shall be available.






COMPLIANCE (YES/NO)

a. Have the records been maintained on the following? - Measurements or results of

internal control and monitoring activities (refer 4.1.2)

- Records of corrective actions and improvement undertaken

R&D Bahilang CPO inter-laboratory crosscheck on 7 March 2016


R&D Pest and Disease Visit Report

Visit Agronomy report

Visit Agronomy Quetionary

FFB Quality Monitoring Form

In Estates, Head of Assistant and Afdeling Staf inspected and monitored the activities at the site on a regular basis. The result of internal control to monitoring activities was available and reviewed, such as monitoring of FFB Quality and Harvest Area. R&D Pest and Disease Visit was conducted by R&D officer, dated on 16-17 October 2016. Monitoring for action plan progress form Visit Agronomy Report, dated on 19-24 September 2016, its Action status of 100% closed for under prunning, midrib on circle, and attacking of Tirathaba low. Records of corrective action and improvement from internal audit were available in the report of Visit Agronomy Report (Appendix 2 Action Plan includes issues and action). For Mill, internal control was conducted by R&D Bahilang regarding the CPO interlaboratory crosscheck using statistical method to compare the quality of CPO for each mill, last visit conducted on 7th March 2016; records was sighted that the result shown there is no big issues on PNS (Negri Lama I Mill) and PND (Negri Lama II Mill). Moreover the organisation conducted monitoring and checking for all applicable procedures, mill operation performance activities through periodic visit of corporate engineering called VE (Visit Engineering), The Report sighted; No. PND-VE-FULL-09-16 dated 18 September 2016was sighted includes Mill key performance, assessment overall mill operations, process efficiency, plant maintenance, management supervision, manpower statement, production cost, EHS management system and sustainability. The result of above audit was on scoring system summarized 76% (above the target 40%) with score 313 out of 414. The corrective action plans was established and followed up by mill, the records was also evident.

Yes

4.1.4 (M) Records of the origins of all third-party FFB sourced (collector, deliver, Cooperative, Farmers Association and outgrower) shall be available.

a. Is there an SOP for third-party FFB sourcing?

b. Is there a list of approved third-party FFB suppliers?

c. Is there proof of observed

AA-MPM-OP-1400-02.R1 (Procedure of Receiving Station)

AA-MPM-OP-1400.17-R3 (Procedure of Traceability)

AA-MPM-OP-1400.18-R3

Standard Operating Procedures for third party FFB sourcing were available. The receiving station split FFB from internal and external sources (third party). Mechanism of third party FFB receiving described the process from proposal from supplier, approval as FFB supplier, FFB pricing, FFB receiving in Mill and payment of FFB.

Yes






COMPLIANCE (YES/NO)

implementation of SOP?

d. Is there daily and summary records of volume and origins of third-party FFB received?

e. Have these records been verified against the available document?

(Procedure of Mass Balance)

Mechanism of third party FFB receiving.

Mechanism of FFB pricing

Record of TBS received from external sources was stated on Recapitulation of FFB Received Report. There were a list of approved third-party FFB suppliers, such as :

- ESTERIA M QQ - SUMIYATIK-AB - Mukhtar Pinem, - KPKS Wahyu Agung - Edy Ahmad - Sitolong Nadangol

There were evidence of SOP implementation such as: FFB grading process 100% in accordance with grading criteria which has been agreed in DO, price of FFB was agree in DO based Memorandum from Regional Office Medan, payment carry out after FFB received and invoice receive by finance. Payment was performed daily. Third party FFB price affected by CPO and PK price, transport, OER, KER, processing cost and others. For example payment recapitulation dated 2 December 2016 IDR 383,525,011 for FFB nett 260.305 MT. Payment has been transfer to an account number in BRI. It was observed that the payment and price was met with DO and procedure. Organization only received legal FFB; There was statement letter from each FFB supplier that: - FFB supplied to PT. HSJ, Negri Lama 2 Mill was not came from forest

area or prohibited area by law and regulation. - FFB supplied to PT. HSJ, Negri Lama 2 Mill was not came from peat

area. - Not performed burning for land clearing in new planting or replanting - Not employed children under 18 years old. Negri Lama 2 Mill records the origins of all third-party sourced Fresh Fruit Bunches. FFB tonnage delivery from the third party was well documented daily (Laporan Harian Pabrik) and monthly (Mill Operation Summary). All records have been verified and it was compliance with available procedure.

4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield. Guidance:






COMPLIANCE (YES/NO)

Long-term fertility depends on maintaining the structure, organic matter content, nutrient status and microbiological health of the soil. Growers should ensure that they follow the best practices. Nutrient efficiency should take account of the age of plantations and soil conditions.

The nutrient recycling strategy should include any use of biomass for by-products or energy production.

One of the guidance may be used as a reference to the Technical Guideline for Oil Palm Development, Directorate General of Estate Crops, Ministry of Agriculture (2006)

4.2.1 (M) A record of SOP implementation to maintain soil fertility that ensures optimal and sustained yield, shall be available Minor to Major

a. Are there SOPs for Good Agricultural Practices in managing soil fertility?

b. Is there evidence that the SOPs have been implemented and monitored?

Agriculture Policy Manual No. AA-APM-OP-1100.09-R3

Work Instruction of Leaf Sampling in Field

Field observation

Procedure for Good Agricultural Practices in managing soil fertility was documented in Manuring Procedure No. AA-APM-OP-1100.09-R3 that the first principle of fertilizer application was each the palm oil stand shall receive a type of fertilizer in accordance with recommendation dosage form R&D. Fertilizer programme and realisation are recorded as mentioned in indicator 4.2.2. The company has also Work Instruction for Leaf Sampling in Field, Rev 00, January 2016. It has been implemented and monitored in the fertilizer recommendation based on annual leaf sampling unit (LSU). LSU was analysed by Nusa Pusaka Kencana Laboratorium for Fertilizer Recommendation 2015, PT. Hari Sawit Jaya. Based on field observation shows that plants are in good condition. The application was according to documented SOP and WI. The fertiliser dosage was in accordance with manuring recommendation based on Manuring recommendation and application report 2016, and manuring technique was in line with the procedure.

Yes

4.2.2 Records of fertilizer inputs shall be available.

a. Is records of fertiliser inputs maintained?

b. Is there records to proof that the fertiliser program is linked to the agronomic report?

c. Is there records of fertilizer usage

Manuring recommendation and application report 2015 and 2016

LUK (Estate Unit Report) KNU period November 2016

Rekapitulasi Pemupukan (Manuring Summary) KNU

Record of fertiliser input was maintained in Manuring Recommendation and application report. The fertiliser program was linked to the agronomic report in LUK (Estate Monthly Report).

Record of manuring realisation in 2015 shows that the realisations are in accordance with the plan/recommendation. The realisation are as follows:

No (Minor NCR

2016-02) OPEN






COMPLIANCE (YES/NO)

per tonne of FFB production (>in Summary Table, specific types of fertilizers)?

todate November 2016

KNU (Mature)

Type Planning /

Recommendation (Kg)

Realization (Kg)

Achievement (%)

ZA 252,554 253,890 101

RP 93,363 93,362 100

Bunch ash 726,550 18,312 3

Kieserite 769 1,336 174

HGFB 15,668 22,464 143

Cu-EDTA 4,438 4,435 100

Zn-EDTA 4,438 3,864 87

Fe-EDTA 16 56 350

MOP - 355,132 -

Total 1,097,796 752,851 69

KNU (Immature)

Type Planning /

Recommendation (Kg)

Realization (Kg)

Achievement (%)

Hi-Kay 857,803 618,408 72

HGFB 12,969 11,577 89

Cu-SO4 19,528 13,366 68

Zn-SO4 36,341 10,976 30

Total 926,641 654,327 71

KAK (Mature):

Type Planning /

Recommendation (Kg)

Realization (Kg)

Achievement (%)

ZA 392,002 392,002 100

MOP 107,046 225,245 210

Bunch ash 236,757 386 0






COMPLIANCE (YES/NO)

RP 145,206 145,211 100

HGFB 1,367 1,368 100

Total 882,378 764,212 87

KAK (Immature):

Type Planning /

Recommendation (Kg)

Realization (Kg)

Achievement (%)

RP 3,728 3,728 100

Hi-Kay 294,391 296,567 101

HGFB 4,322 4,349 101

Cu-SO4 10,722 10,831 101

Zn-SO4 10,722 10,831 101

Total 323,885 326,306 101

Programme and realisation of manuring 2016 (until November) in KNU estate are as follow: Mature:

Type Planning /

Recommendation (Kg)

Realization (Kg)

Achievement (%)

ZA 444,347 440,614 99

MOP/KCL 789,069 782,449 99

RP 145,061 143,796 99

HGFB 37,787 37,478 99

Cu-EDTA 7,557 7,493 99

Zn-EDTA 7,557 7,493 99

Fe-EDTA 39 0 -

Kieserite 375 371 99

Dolomite 233,668 232,030 99

Total 1,665,460 1,651,724 99

Immature:






COMPLIANCE (YES/NO)

Type Planning /

Recommendation (Kg)

Realization (Kg)

Achievement (%)

Hi-Kay Plus 1,016,487 835,770 82

HGFB 22,877 18,267 80

Cu-SO4 43,924 35,921 82

Zn-SO4 37,074 21,318 58

Dolomite 33,269 33,271 100

NPK 12:12:17:2

144,649 144,658 100

TSP 11,644 11,648 100

Total 1,309,924 1,100,853 84

Programme and realisation of manuring 2016 (until November) in KAK estate are as follow: Mature:

Type Planning /

Recommendation (Kg)

Realization (Kg)

Achievement (%)

ZA 391,258 391,310 100

MOP/KCL 214,607 214,622 100

RP 168,518 168,525 100

HGFB 7,365 7,368 100

Total 781,775 781,825 100

Immature:

Type Planning /

Recommendation (Kg)

Realization (Kg)

Achievement (%)

Hi-Kay Plus 710,767 608,530 86

HGFB 11,978 11,796 98

Cu-SO4 25,291 22,002 87

Zn-SO4 22,001 13,269 60

RP 3,728 3,728 100






COMPLIANCE (YES/NO)

Total 773,765 659,325 85

Fertilizer usage per tonne of FFB production is documented in each estate for specific type of fertilizer.

4.2.3 Records of periodical leaf, soil and visual analysis shall be available

a. Is there SOPs for tissue and soil sampling?

b. Is there evidence of implementation of the SOPs, including availability of records?

c. Is there records of tissue and soil analysis?

d. Is the results of the study incorporated into the fertilizer program?

Work Instruction of Leaf Sample Taking, January 2016.

Work Instruction of Soil Sample Taking, dated 14 January 2016

Foliar Analysis Report, issued 30 June 2016

The company has Work Instruction for Leaf Sampling in Field, Rev 00, January 2016. It has been implemented and monitored in the fertilizer recommendation based on annual leaf sampling unit (LSU). The SOP for soil sampling unit was available in the Work Instruction of Soil Profile Sampling Taking, R&D AA IK about Soil Profile, Rev : 00, 14 January 2016. Leaf and Soil sample are analysed by PT. Nusa Pusaka Kencana Laboratorium for Fertilizer Recommendation. Implementation of leaf sampling analysis result was recorded in Foliar Analysis Report, e.g dated 30 June 2016, Ref no. 078/INT/R&D/JUN/16 with number of sample 24 samples for KNU and dated 17 June 2016, Ref no.069/INT/R&D/JUN/ L/16. Implementation of soil sampling analysis result was recorded in soil sampling report issued by R&D Asian Agri Group. It was demonstrated of reporting by R&D dated on 3 February 2011 at Block B94f/1994, B94j/1994, B97c/1997 Afdeling 2, C03l/2003 Afdeling 3, KAK explained of profile soil analysis data such as physiography, topography, humidity, temperature, drainage, etc. Whilst for KNU was conducted on 16 December 2010, Div of 3, at block of I-97-f/1997, J-39-q/1993, H-91-k/1991, G-91-r/1991, G-91-w/1991, G-91-z. Records of soil analysis was available and the result of study incorporated into the fertilizer program each 6 (six) years. Soil analysis was used within agronomy and R&D program (fertilizer program).

Yes

4.2.4 A nutrient recycling strategy is recorded, including use of Empty Fruit Bunches (EFB), land application, and palm residues after replanting

a. Is there a nutrient recycling strategy Agriculture Policy Manual No.

AA-APM-OP-1100.09-R3

There was a nutrient recycling strategy at KNU and KAK include bunch / boiler ash from burning EFB in Boiler and SOP was available in the Agriculture

Yes






COMPLIANCE (YES/NO)

in place?

b. Does the strategy include the following?

Clear objectives and time-bound targets

Inventory of - EFB - POME - Fibre - Boiler ash - Kernel shell - Palm residues from

replanting

Biomass recycling program

Implementation and monitoring records

Note to auditor: Ground verification required

Recapitulation of fertilizer for mature

LUK November 2016

Field observation at Negri Lama Utara Estate (KNU) and Aek Kuo Estate (KAK).

Policy Manual – Manuring, No. AA-APM-OP-1100.09-R3 that bunch ash was only recommended of dosage to mature palm oil by R&D. The target time-bound was explained in the Recapitulation of fertilizer for mature. Boiler ash management was carried out the application for ground at estate area as organic fertilizer. Field observation was conducted at Block B11h Division 2 KNU and Block B14f Division 2 KAK. Record of monitoring was available in recapitulation evaluation of fertilizer. It was observed that Boiler Ash application is comply with best agriculture practices. Based on field observation at KNU and KAK, there is no application of EFB or POME in the plantation because most of the area is peat. Inventory from palm oil process in 2016, as follows :

- Boiler ash 18,698 kg (as organic fertilizer) Monitoring records was available in LUK November 2016.

4.3

Practices minimise and control erosion and degradation of soils. Guidance: Techniques that minimize soil erosion are well known and should be adopted, where appropriate. These should include practices such as ground cover management, biomass recycling, terracing, and natural regeneration or restoration instead of replanting.

4.3.1 (M) Maps of any fragile soils shall be available.

a. Is there soil maps showing presence of fragile soils and problem soils (refer to 4.3.6)?

b. Are maps georeferenced and of appropriate scale (1:50,000)?

Map of Soil and Land Suitability Soil map and land suitability was available in scale 1: 20,000, projection system: Universal Transverse Mercator, Datum: WGS 84, Zone: 47 M, Central

Meredien: E 99°. Soil classification are as follows:

KNU

Soil Classification Topography

(%) Ha %

Yes






COMPLIANCE (YES/NO)

Typic Endoaquepts 0 - 3 107 2.7

Histic Humaquepts 0 - 3 308 7.6

Typic Haplosaprists (peat < 3 m) 0 - 3 774 19.2

Typic Haplosaprists (peat 1 - 3 m) 0 - 3 1,561 38.7

Typic Haplosaprists (peat > 3 m) 0 - 3 1,280 31.6

KAK


(%) Ha %




Typic Haplosaprists (peat 1 - 3 m) 0 - 3 583 22.0

Typic Haplosaprists (peat > 3 m) 0 - 3 557 21.1

Planting on peat (including thickness > 3 m) conducted in year 2006, 2010, and 2011, at that time; there was no prohibition of planting on peat yet. Moratorium on planting on peat (Presidential Decree No. 10/2011) newly published on May 20th, 2011.

4.3.2

A management strategy shall be in place for plantings on slopes above a certain limit (this needs to be soil and climate specific). Specific Guidance: For 4.3.2: Management strategy on areas planted with steep slope may refer to the Technical Guidance for Oil Palm Development, Directorate General of Estate Crops, Agriculture Ministry (2006). Area with slope of >40% shall be avoided

a. Is there a management strategy in place for plantings on slopes?

b. Does the management strategy include the following? - Identification of steep areas not

suitable for planting - Policy of planting on slopes - SOPs to minimise soil erosion

based on local soil and climate conditions, e.g. ground cover


Peat Subsidence Monitoring, period January and July 2016.

SOP of planting on slopes was available in AA-APM-OP-1100.05-R2 and SOP to minimise soil erosion based on local soil and climate conditions was available in AA-APM-OP-1100.05-R2. The organisation has management strategy for planting on slopes above certain limit such as terracing, as referred to company’s SOP and work instructions. The Work instruction described preparation for planting including planting on slopes area has been developed by organisation: - Flat undulating 0o – 5o - Rolling 6o - 12o

Yes






COMPLIANCE (YES/NO)

management, biomass recycling, terracing, and natural regeneration or restoration instead of replanting

c. Is there proof of records of field inspection on SOP implementation?

- Hilly 13o - 20o - Steep >20o Practices to control and minimize erosion have been applied by : - Terracing - Making the catchment where runoff water, called: “Tapak Kuda”. - Making the catchment where runoff water, called “Rorak”. - Planting legume cover crop. There was proof of records of field inspection on SOP implementation in Peat Subsidence Monitoring.

4.3.3 A road maintenance programme shall be in place.

a. Is there a road maintenance programme in place with supporting budget and resources?

b. Is there road maintenance records?

Road maintenance program in 2016

PT. HSJ has a road maintenance program in place with supporting budget and resources in Planning and Realization for Manual and Mechanical Maintenance, as follows : Road Hardening

Afdeling Plan (m) Realisation (m)

1 120 120

2 6,887 6,459

3 1,502 1,502

Total 8,509 8,081

Realization was not full form planning because of road condition is wet due to rainy season during September – December 2016. During observation, it was observed that even though wet, the road still can be passed by vehicle. There was no damage of road in PT. HSJ area.

Yes

4.3.4

(M) Subsidence of peat soils shall be minimised and monitored. A documented water and ground cover management programme shall be in place. Specific Guidance: For 4.3.4: For existing plantings on peat, the water table should be maintained at an average of 50cm (between 40 - 60cm) below ground surface measured with groundwater






COMPLIANCE (YES/NO)

piezometer readings, or an average of 60cm (between 50 - 70cm) below ground surface as measured in water collection drains as per the Manual Best Management Practices for existing oil palm cultivation on peat, June 2012 or as per existing regulation if equal or shallower measured through a network of appropriate water control structures e.g. weirs, sandbags, etc. in fields, and watergates at the discharge points of main drains (Criteria 4.4 and 7.4). Regulations regarding water table on peat may refer, but not limited, to: 1. Government Regulation No. 71 year 2014 regarding Protection and Management of Peat Ecosystem 2. Regulation of Minister of Agriculture No. 14 year 2009 regarding Guideline of Oil Palm Cultivation on Peat 3. Regulation of Minister of Agriculture No. 11 year 2015 regarding Guideline of Indonesia Sustainable Palm Oil Plantation (ISPO)

a. Is there an SOP to provide guidance on subsidence management?

b. Does the SOP make reference to the RSPO BMPs on peat?

c. How is subsidence being monitored?

d. Are there records of subsidence monitoring?

e. How is subsidence being minimised?

f. Is there a water management programme and evidence of implementation? For existing plantings on peat, the water table should be maintained at an average of 50cm (between 40 - 60cm) below ground surface measured with groundwater piezometer readings, or an average of 60cm (between 50 - 70cm) below ground surface as measured in water collection drains, through a network of appropriate water control structures e.g. weirs, sandbags, etc. in fields, and watergates at the discharge points of main drains (Criteria 4.4 and 7.4).

g. Is there a ground cover management

Agriculture Policy Manual No. AA-SOP-OP-1100.17-R1

Peat Subsidence Monitoring, period January and July 2016

Water Level Monitoring Data

PT. HSJ has procedure to provide guidance on subsidence management in Water Management No. AA-SOP-OP-1100.17-R1 about Water Management. Subsidence pipe position based on peat depth and topography have been determined by R&D Department was between of stand in row free from weed and midrib pile to reach the substratum (mineral soil). Measuring was half-yearly conducted and Water height monitoring was weekly with optimum size of 50-70 cm. Control of drainage or water management, especially in the area of peat, used tools such as Stick-scale monitoring, and sluices (water gate) or drain block so as to maintain the ground water level. Its SOP reference to the RSPO PC, HCV, ISPO, and HCS. The subsidence was half-yearly monitored in Recapitulation of Peat Subsidence Monitoring. The last monitoring record for KNU was on December 2016. Result demonstrated that there was some subsidence in several Block, however it still under control. KNU:

No. Block January (cm)

July (cm) December (cm)

Subsidence (cm)

01 A16h 7.5 8 0 -8

02 K16a 20 41 0 -41

03 C13d 15.5 16 19 3

04 Protected Forest

8 9 9.5 0.5

05 A16c 0 1.5 0 -1.5

06 B12a 0 2 4 2

07 B11q 0 1.5 2.5 1

08 K94f 0 2 3 1

09 K16g 0 2 0 -2

Yes






COMPLIANCE (YES/NO)

programme and is there evidence of implementation?

10 K14c 0 1.5 3 1.5

11 C13h 0 2 3.5 1.5

12 C13n 0 2 3.5 1.5

13 C14h 0 1.5 3 1.5

14 C14n 0 2 4 2

KAK:

No. Block January (cm)

July (cm) December (cm)

Subsidence (cm)

01 A15a 0.7 2.1 2.5 0.4

02 A15a 0.7 2.5 2.9 0.4

03 A15c 0.5 1.5 1.9 0.4

04 A15b 0.8 1.8 2.3 0.5

05 B15c 1.0 2.2 2.6 0.4

06 B15d 0.5 1.7 2.1 0.4

07 B14j 0.5 2.0 2.5 0.5

Water management programme has been implemented by PT. HSJ, among others by constructing water gate that equipped with water pump, water table monitoring, and piezometer. Summary of water level monitoring for period 2016 are as follow:

Month Afd 1 Afd 2 Afd 3 Afd 4 Average

January 60 55 60 60 58.75

February 47 48 50 41 46.50

March 77 83 73 78 77.75

April 87 84 79 93 85.75

May 57 65 55 53 57.50

June 40 40 35 35 37.50

July 35 40 40 40 38.75

August 35 55 40 45 43.75

September 45 60 55 55 53.75

October 27 40 24 33 31.00

November 35 45 38 40 39.50

December 20 34 45 31 32.50






COMPLIANCE (YES/NO)

Average 47.08 54.08 49.50 50.33 50.25

PT. HSJ has ground cover management programme, such as planting legume cover crop. Field observation has been conducted at Block B14 Division 2 KAK Estate. it was evident that ground cover management programme has been implemented.

4.3.5

Drainability assessments shall be required prior to replanting on peat to determine the long-term viability of the necessary drainage for oil palm growing. Specific Guidance: For 4.3.5: Where drainability assessments have identified areas unsuitable for oil palm replanting, plans should be in place for appropriate rehabilitation or alternative use of such areas. If the assessment indicates high risk of serious flooding and/or salt water intrusion within two crop cycles, growers and planters should consider ceasing replanting and implementing rehabilitation.

Plantations on peat should be managed at least to the standard set out in the ‘RSPO Manual on Best Management Practices (BMPs) for existing oil palm cultivation on peat’, June 2012 (especially water management, fire avoidance, fertilizer use, subsidence and ground surface management).

a. Was a drainability assessment conducted before replanting on peat?

b. Was a flood risk map provided as a result of the drainability assessment?

c. If the drainability assessment shows that an area is unsuitable for replanting, are there alternative plans in place for rehabilitation and alternative use in accordance to the RSPO BMPs?

AA-APM-OP-1100.20-R4 Agriculture Policy Manual Replanting

SOP for Drainability assessment was available in SOP of Replanting Agriculture Policy Manual No. AA-APM-OP-1100.20-R4. That mentioned before replanting, estate management and operation conducted the stages of land clearing that apply of method zero burning and drainability assessment. This assessment to identify and keep off the planting in non-productive area and has a high potential for flooding. Other than that, this assessment was used to measure that peat area can be distributed using gravity. It also was found in previous audit (Transfer Audit).Because of repeated NC then this time upgraded to Major NC. Flood risk map was not provided yet due to no drainability assessment yet.

YES (Major NCR

2016-04) CLOSED

4.3.6 A management strategy shall be in place for other fragile and problem soils (e.g. sandy, low organic matter, acid sulphate soils).






COMPLIANCE (YES/NO)

a. Is there a management strategy in place for other fragile and problem soils?

b. Does the management strategy include SOPs for the management of other fragile and problem soils?

c. Is inspection and implementation records available?


Subsidence and Water Management monitoring Soil map and land suitability, 2011

Management strategy for soil problem was available in Environment Impact Assessment (EIA), Study of palm oil plantation and process at PT. Hari Sawit Jaya, Labuan Batu Regency, North Sumatera Province. Peat area management experienced many obstacles, such as striking deficiency of macro and micro nutrients, soil subsidence, lower support capacity, so that was feared of plant will be uprooted. There is no other type of fragile and problem soil in PT. Hari Sawit Jaya.

Yes

4.4 Practices maintain the quality and availability of surface and ground water.

4.4.1

An implemented water management plan shall be in place. Specific Guidance: For 4.4.1: The water management plan will: a. Take account of the efficiency of use and renewability of sources; b. Ensure that the use and management of water by the operation does not result in adverse impacts on other users within the catchment area, including local communities and

customary water users; c. Aim to ensure local communities, workers and their families have access to adequate, clean water for drinking, bathing, cleaning and latrine purposes; d. Avoid contamination of surface and ground water through run-off of soil, nutrients or chemicals, or as a result of inadequate disposal of waste including Palm Oil Mill Effluent

(POME).

a. Is there a water management plan in place for mill and plantation with identified actions?

b. Does the plan include the following?

Identification of water sources

Efficient use of water

Renewability of water source

Impacts on catchment area and local stakeholders

Access of clean drinking water all year round for stakeholders

Avoidance of surface and ground water contamination

Permit of Surface Water Usage from Keputusan Kepala Badan Pelayanan Perizinan Terpadu Propinsi Sumatera Utara Nomor: No. 610/479/BPPTSU/2/XII.I/X/2016 dated 19 Oktober 2016.

LUP (Laporan Unit Pabrik)

Water analysis measurement for period 2016 by UPT. Laboratorium Kesehatan Daerah

Records of water consumption period 2016

The main source of water for Mill activity is surface water – Bilah River. Permit of water abstraction from surface water has been obtained on 19 Oktober 2016 and valid through 3 years. Flow meters were installed to monitor water usage. The volume of water usage is monitored monthly both for process and domestic usage. Water consumption data July – November 2016 was sighted. Surface water quality is monitored every six months. Surface water quality was analysed both for upstream and downstream. Monitoring result of surface water quality was reviewed for 1st and 2nd semester 2015 against PP #82/2001 class II. Quality of river water was in line with PP #82/2001 class II.

Water management plan include water source and distribution identification, volume of water utilization, parameter/standards of water utilization, identify the impacts include water effluents/wastes and also the method to reduce and

NO (Minor NCR

2016-05) OPEN






COMPLIANCE (YES/NO)

c. Have the identified actions in the plan been implemented?

Water management programme 2016

control.

The monitoring of water volume utilization for process was conducted, records was also sighted that YTD November-2016 achieved 254,624 m3 in volume that above the year period 2015 are 214,942 m3 due to exceed in FFB been processed.

Year FFB Process (MT)

Water Consumption (m3)

2015 162,044 214,942

2016 (November) 196,175 254,624

The organisation has established a program to reduce water consumption, such as: repair the boiler steam outlet pipelines toward turbines by installed joint expansion to replace the elbow in order to reduce losses; to recycle the vacuum drier water discharge into kernel processes operation; steam optimization by setting the boiler main valve; recycle the sterilizer condensates for solution oil phase decanter and water dilution press in order to minimize water usage.

4.4.2

(M) Protection of water courses and wetlands, including securing and maintaining appropriate riparian and other buffer zones, at the time of or prior to replanting shall be demonstrated. Specific Guidance: For 4.4.2: Refer to the ‘RSPO Manual On Best Management Practices (BMP) for management and rehabilitation of natural vegetation associated with oil palm cultivation on peat’, July 2012. Growers and millers should address the effects of their use of water and the effects of their activities on local water resources.






COMPLIANCE (YES/NO)

a. Is there a map identifying water courses and wetlands?

b. Are the water courses and wetlands protected?

c. Are the riparian and buffer zones maintained and restored in existing plantation and replanting areas?

d. Is there SOP for riparian and buffer zone protection?

e. Has the SOP been implemented?

Identified water courses and wetland in PT. Hari Sawit Jaya, documented in HCV Identification report

AA-APM-OP-1100.05-R1-Soil and Water Conservation

Riparian restoration program

Field observation

Organization has identified water courses and wetland in the plantation area and documented in riparian map with scale 1:80,000. There were identified water courses and wetland in PT. Hari Sawit Jaya. Protection of waterways and wetlands have been made by the company with the following way :

- Protection of riparian areas (20 m left and right side) with no chemical crops care activities both fertilizer and herbicide spraying

- Conduct rehabilitation of riparian

Policy of riparian buffer zone management at or before replanting was provided in related procedure. Procedure mentioned that riparian buffer zone is prohibits the application of agrochemicals on the riparian area.

The other programs for maintaining and restoring of riparian buffer zones are:

- Manual upkeep of weeds controlling in 0-10 m of riparian buffer zones. - Planting bamboo and ”ketapang” at River and trench and planting

vertiver, sungkai, angsana and pohon roda at Riparian zone. - Put permanent pegs per 200 meters and paint the tree as boundary sigh. - Not dispose stem to River and trench.

Organization also has been establish the procedure for riparian and buffer zone protection which documented in AA-APM-OP-1100.05-R1-Soil and Water Conservation. The organisation has a procedure that prohibits the application of agrochemicals on the riparian area: Environmental Field Procedure on the Restoration of Riparian and Areas surrounding Lakes/Reservoirs and Springs (AA-KL-12-EFP), issued on August 1st 2010.

The organisation has declared its HCV area of riparian to be 50 meters wide. Prohibition of agrochemicals application along the riparian area, weeding and tree root levering, disposing/ discarding/throwing midrib to rivers and creeks were implemented to protect and maintain the quality of water in the rivers. For further elaboration, please see section for Criterion 5.2.

Riparian zone were well maintain, the following was activity to maintain riparian zone such as :

- Boundary markers placement in 2 rows of palm trees (20 m) related

YES






COMPLIANCE (YES/NO)

restrictions spraying of chemicals and chemical fertilizers in the area of 20 m side of the river. There was the evidence during the audit, riparian zone was well maintain and no contamination of chemical usage and fertilizer

- Warning boards placement which contain information restrictions the pesticide usage and chemical fertilizers in the riparian area.

- Riparian rehabilitation by planting vetiver grass, a shade trees and barriers to erosion trees (Bamboo, Angsana, Sungkai, etc.). There was the evidence of plan and realization for riparian rehabilitation, its observed Bamboo, Angsana trees and Sungkai was planted and grow well in both side of the river.

4.4.3

Records for monitoring of effluent especially BOD (Biochemical Oxygen Demand) and efforts to comply with legal requirements, shall be available (see criteria 2.1 and 5.6) Specific Guidances: For 4.4.3 : The references and standard may refer, but not limited to: a. Decree of the Minister of Environment No. 51 year 1995 regarding Industrial Effluent Quality b. Decree of the Minister of Environment No. 28 year 2003 regarding Technical Guidance Assessment Effluent Usage from Industry to Soil in Palm Oil Plantation. c. Regulation of the Minister of Environment No. 12 year 2006 regarding Requirements and Mechanism of Legal Permit to Discharge Effluent to the Sea. National regulations relate to riparian strip are, such as:

1. Government Regulation No. 38 year 2011 regarding River. 2. Government Regulation No. 37 year 2012 regarding Management of Riparian Strip. 3. Government Regulation No. 26 year 2008 regarding National Landscape, clause 56 (2) riparian strip outside settlement area is divided with following criteria:

- Riparian strip of at least 5 meter width from the outer dike along the river bank with dike - Riparian strip of at least 100 meter from river side along main river bank without dike outside settlement area, - Riparian strip of at least 50 meter from river side along sub-main river bank without dike outside settlement area

4. Presidential Decree No. 32 year 1990 clause 16, regarding Criteria of Riparian Strip: a. At least 100 meter from outer main river and 50 meter from sub-main river, which is located outside settlement area. b. For river in settlement area, the riparian strip should be appropriate to build inspection path between 10 to 15 meters width.






COMPLIANCE (YES/NO)

5. Regulation of the Minister of Public Work No. 63 year 1993 regarding Riparian Strip, River Usage Area, River Authorization Area, Criteria of Riparian Strip Line.

a. Is the mill effluent treatment process in place?

b. Is there a process in place for checking and monitoring water discharge quality, particularly BOD?

c. Is the water discharge quality in compliance with national regulations?

d. Does the mill have a license for treatment, discharge or land application of mill effluent, and is the mill in compliant with the

Permit of waste water discharge from Bupati Labuhan Batu Nomor: 503.660/277/BLH/WAS/2013 on 19 September 2013

Analysis Report of Waste Water Quality for PNS, KNS and KNC.

POME is monitored monthly as required by permit of waste water discharge (IPLC) on 19th of September 2013. The permit was valid through 5 years. The result of POME monitoring was reviewed including measurement of BOD for period January – November 2016. The Ministry of Environment Decree Permen 05/2014 required that BOD of POME discharged is less than 100 mg/litre. The result of POME quality during this period was under 100 mg/litre.

YES






COMPLIANCE (YES/NO)

requirements of the license?

4.4.4 Monitoring of mill water use per ton of FFB shall be recorded

a. Are there procedures to measure mill water usage, and are the procedures implemented?

b. Are there records of mill water use per tonne of Fresh Fruit Bunches (FFB)?

Mill Operation Summary 2015 and 2016

Mill water use per tonne of FFB is monitored monthly. Result of monitoring of mill water use per tonne of FFB was sighted for 2015 and period January to December 2016.

Item 2015 (m3/ton

FFB) 2016 (m3/ton

FFB)

mill water use per tonne of FFB 1.19 1.05

It was noted that mill water use per tonne of FFB period January to December 2016 (1.05 m3/ton FFB) was below compared with year 2015 (1.19 m3/ton FFB). All of them were below the budget.

The organisation has a program to reduce water consumption, such as:

- repair the boiler steam outlet pipelines toward turbines by installed joint expansion to replace the elbow in order to reduce losses;

- to recycle the vacuum drier water discharge into kernel processes operation;

- steam optimization by setting the boiler main valve; - Recycle the sterilizer condensates for solution oil phase decanter and

water dilution press in order to minimize water usage.

Yes

4.5

Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management techniques. Guidance: Growers should apply recognised IPM techniques, incorporating cultural, biological, mechanical and physical methods to minimise the use of chemicals. Native species should be used in biological control where possible. Regulations to be referred are such as: a. Guidance for Advancement of Pesticides usage, Directorate General of Infrastructure and Facilities, Ministry of Agriculture (2011)






COMPLIANCE (YES/NO)

b. Technical Guidance for the Development of Oil Palm Plantation, Directorate General of Estate Crops, Ministry of Agriculture (2006)

4.5.1 (M) Monitoring of Integrated Pest Management (IPM) plan implementation shall be available.

a. Is there a documented IPM plan?

b. Does the IPM plan include the following?

Identification of potential pests and thresholds

What are the techniques used (cultural, biological, mechanical and physical methods)?

What are the native species used as part of the biological control method?

Does it help in reducing the use of chemicals over a period of time?

Prophylactic use of pesticides

Minimization of pesticide use

Review on the plans to suit the present condition such as replanting?

c. Is there an SOP to implement the plan and monitor its effectiveness?

d. Is there records of pest occurrence and control?

IPM Plan

Tyto alba monitoring

Planning and realization for Beneficial plant

Record of rate census

Record of caterpillars census

Document of IPM Plan was available at PT. HSJ. Stages of IPM program were :

- Visual observation (visual plant e.g. leaves or broken stems and fruit rot) - Conducting a census (to determine the distribution and level of attack) - Control (manual, biological or chemical). - Census of evaluation (to see the effect of control).

IPM program covered census of caterpillars, termites and rodents and upkeep of beneficial plant. Biological control used Tyto alba and Beneficial plant (Cassia tora). Other than that, protect the predator species, such as Kobra hitam (Naja sumatrana), Elang tikus (Elanus caeruleus), ect, so that can reduce the use of chemical. The last monitoring (census) of Tyto alba at KAK in December 2016 was recorded form 25 cages, found 5 empty. For Benefial plant at KNU was planted 197 stands of Cassia cobanensis, 100 stands of Turnera subulata, 100 stands of Antigonon leptopus and at KAK 2357 stands of Cassia cobanensis, 1594 stands of Turnera subulata, and 771 stands of Antigonon leptosus. Rat census was conducted every 2 months coincide with the census palm leaf-eating caterpillars. The last rat census in KNU and KAK in November 2016 resulted that attacking level was < 5%, which is under the threshold.

Yes

4.5.2 Training records of Integrated Pest Management (IPM) shall be available.






COMPLIANCE (YES/NO)

a. Is there records of training provided to those involved in the implementation of IPM?

Training record Records of training provided to those involved in the implementation of IPM were available at PT. HSJ. Training was held annually to untrained personnel. The last training was conducted on 25 June 2016 by R&D for Agronomy Staff and Foreman in Clinic IPM and Pest and Disease Training. List of participant attendance was sighted. Training material covered IPM technique and implementation.

Yes

4.6

Pesticides are used in ways that do not endanger health or the environment. Guidance: The RSPO has identified some examples of alternatives to pesticide use, which include those listed in the ‘Research project on Integrated Weed Management Strategies for Oil Palm; CABI, April 2011’.

Pesticides application on peatland and swamp may use IPM methods, such as in the RSPO Manual on Management Practices (BMPs) for Management and Rehabilitation of Natural Vegetation Associated with Oil Palm Cultivation on Peat.

4.6.1

(M) Documented evidence shall be available to show that pesticide used based on regulations and the use of pesticide is specific to target species with appropriate dosage which have minimal impact on non-target species. Specific Guidance: For 4.6.1: Measures to avoid resistance on target species (such as application of pesticide rotations) should be applied, which consider less harmful alternatives and IPM.

a. Does the organization have a policy on safe use of chemicals?

b. Does the organization have SOPs for use of selective products that are specific to target pests, weeds, or diseases and which have minimal effect on non-target species? i. Measures to avoid the

development of resistance (such as pesticide rotation) should be applied.

ii. Is there a list of all pesticide with target species and justification of use?

Company Policy Agriculture Policy Manual No. AA-APM-OP-1100.11-R1

PT. HSJ has a policy on safe use of chemicals in Company Policy. The company implement and maintain integrated health and safety in accordance with national and international management standard applicable. PT. HSJ have SOPs for using of selective products that are specific to target pests, weeds, or diseases and which have minimal effect on non-target species available in Agriculture Policy Manual No. AA-APM-OP-1100.11-R1 about Management Pesticide. This procedure was explained that using pesticide based on target, such as Fungicide to control fungus of pathogen (example: Benomil, Heksakonazol, Mankozeb, and Triadimefon), Herbicide to control weed (example: Fluroksipir, Glifosat, Paraquat, Sulfosat), and Insectiside to control insect pest (example: deltametrin, sipemetrin, sihalotrin). It was available a list of all pesticide with target species and justification in Using of Pesticide and Its Target in 2016. For example the uses of Tricoderma

YES (Major NCR

2016-03) CLOSED






COMPLIANCE (YES/NO)

iii. The justification should consider less harmful alternatives and IPM.

c. Is there evidence of implementation of SOP on the ground?

10.194 litre to keep the resistance of Ganoderma attack. Daily monitoring of pesticide uses was available in foreman book. Less harmful alternatives and IPM was applied by planting of beneficial plants, building house of owl, detection and census of caterpillar, development of fruit trap and pheromone trap. Pesticides used by the supply bases of Negri Lama II Mill has license and registered in the Agriculture Department as mentioned in Pesticide Commission Book “Buku Komisi Pestisida”:

1. Gramoxone (paraquat 200 g/l), License RI.010301197436, valid through 18 March 2019.

2. Solusi 865 SL, license RI.0103012003931, valid through 29 April 2018. 3. Elang (Isopropilamina glyphosate 480 g/L), license RI.01030119941170,

valid through 9 January 2017. 4. Kenrane (Trifloroksipir - 1 - methyl heptyl ester 288 g / l), License

RI.01010120103759, valid through 20 December 2020. 5. BIONASA (isopropylamine glyphosate 480 g/l), License

RI.01030120031806, valid through 29 April 2018. 6. Metsulindo 20 WP(metil metsulfuron: 20%), License

RI.01030119991484, valid through 11 May 2021 7. Kenlon 480 EC, license RI.01030120062433, valid through 23 June

2016 8. Regent 50 SC, license RI.01010119951192, valid through 31 December

2020 9. Polydor 25EC (lamda sihalotrin: 25 g/l), License RI.01010120041994,

valid through 9 December 2018 10. Thuricide HP, License RI.0101011977298, valid through 9 January 2017 11. Amcothene 75 S, license RI.01010119921006, valid through 17 October

2017. It was noted that there were agrochemicals being used which were not registered during this audit. During audit it was evidence that procedure was implemented.






COMPLIANCE (YES/NO)

4.6.2 (M) Records of pesticides use (including active ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications) shall be available.

a. Does the company have a pesticide application program?

b. Is records of pesticides use available?

c. Do the records detail the active ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications?

Document of Pesticide Chemical Budget in 2016

Records of pesticide using in Pesticide Monitoring

PT. HSJ has a pesticide application program in Document of Pesticide Chemical Budget in 2016. Records of Pesticide Monitoring detail the active ingredients used and their LD50 , area treated, amount of active ingredients applied per ha and number of applications. Records of pesticide using in Pesticide Monitoring 2016 (to date November) in KAK Estate, as follows :

No Description Quantity

KNU KAK

1 Trichoderma (kg) 43.00 13,670

2 Gramoxone (lt) 3,351.18 3,439

3 Solusi 865 SL (lt) 372.77 2

4 Elang 480 SL (lt) 4,263.70 2,529

5 Kenrane 288 EC (lt) 1,679.65 448

6 Bionasa 480 AS (lt) 79.30 3,394

7 Metsulindo (kg) 209.25 354

8 Kenlon 480 EC (kg) 4,844.01 7

9 Regent 50 SC (lt) 6,745.90 500

10 Polydor (lt) 3,323.70 5,763

11 Thuricide HP (kg) 169.80 37

12 Manuver 400 SL (lt) - 53

13 Amcothene 75 SP (kg) 4,214.50 5,358

Records of pesticide using in Pesticide Toxicity Monitoring in 2016 are as follows : KAK

Active Ingredient Chemical Amount

Active Ingredient Amount

Application Per ha

Ion Paraquat 200 gr/l 3,439 690 0.13

Yes






COMPLIANCE (YES/NO)

Isoprofil Amina Glifosat 480 g/l

3,394 1,630 0.32

Fipronil 50 g/lt 500 25 0.005

Metil Metsulforun 20%

354 7,085 1.38

Isoprofil Amina Glifosat 480 g/l

2538 1218 0.24

Floroksipir 200 g/l 448 90 0.02

Triklopir 480 g/l 9 4 0.00001

Asefat 5,358 402 0.08

Lamda sihalotrin 6,913 1,728 0.34

KNU

Active Ingredient Chemical Amount

Active Ingredient Amount

Application Per ha

Metil Metsulfuron 418.45 83.69 0.04

Paraquat diklorida 5,715 1,577 0.82

Isoprofil amina glifosat

1,974.50 948 0.49

2.4-D dimetil amina 50.10 43 0.02

Lamda sihalotrin 3,762.20 94 0.05

Fipronil 671.58 34 0.02

Asefat 5,508.32 413.399 0.21

Metaldehida 474 2.84 0.001

Alkilaril poliglikol eter 1,036.40 415 0.22

4.6.3

(M) Any use of pesticides shall be minimised as part of a plan, and in accordance with Integrated Pest Management (IPM) plans. There shall be no prophylactic use of pesticides, except in specific situations identified in Indonesia Best Practice guidelines. Specific Guidance: For 4.6.3: Justification of the use of such pesticides will be included in the public summary report.

a. Does the company have an IPM

plan?

IPM Program – Budget 2016

SOP AA-APM-OP-1100.10-R1 Pest and Diseases Control

Integrated Pest Management (IPM) program included:

Visual observation (e.g. broken leafs or stems and fruit rotten)

Conducting census to determine the distribution and level of attack.

Yes






COMPLIANCE (YES/NO)

b. Has that plan been implemented?

c. Is the effectiveness of the IPM plan monitored?

d. Are there records showing that the use of pesticides have been minimised in accordance with Integrated Pest Management (IPM) plan?

e. Has there been prophylactic use of pesticides? If so, justification must be provided in accordance to National Best Practices.

Report of pest and diseases, July and December 2016

Recapitulation of pest census

LUK (Estate Report)

Field observation

Control (manual, biological or chemical), e.g hand picking, light trap, planting of beneficial plant (nest of natural predator for caterpillars)

Pesticide usage as a last alternative in the control of pests and diseases

Census of evaluation (to see the effect of control) IPM plan was well implemented and documented, e.g.:

Census of caterpillar is conducted monthly. Based on result of caterpillar census in 2016, there was caterpillar attack in October 2016, the plantation has performed several action to control the attack by chemical, manual and biological control. The result is there is no more attack in November 2016 or 0.2 caterpillar/midrib, which is under the threshold (10 caterpillar/midrib).

To control rat, the organisation applied Tyto alba (owls) as predator of rat. House of owl was built one in 25 Ha. Condition of Tyto alba is monitored three times a year.

Census of Oryctes rhinoceros performed monthly. Oryctes attack were controlled by development of fruit trap.

Planted the beneficial plant as the host/nest for natural predator for caterpillars (Eucanticona purcelata, cycanus sp). The beneficial plant such as: Turnera subulata, Antigonon leptopus and Casia cobanensis planted in the collection and the main road. Planting and upkeep of beneficial plants in KNU and KAK Estates were sighted and during field observations, it was observed that beneficial plants were well maintained.

All pests are controlled with biological method, there is no uses of insecticides, the use of herbicides has been minimised as part of a plan, and in accordance with Integrated Pest Management (IPM) plans. Use of pesticides in the field was always lower than the planned budget. It also shows the company's commitment to always reduce pesticide usage and give priority to the prevention of mechanical, biological and integrated pest management. It was evidence that there was no prophylactic use of pesticides in KNS, KNC, KNU and KAK. Pesticide only used and apply for weeds and pest.

4.6.4 The evidence shall be available to demonstrate that use of Pesticides, categorized in Class 1A or 1B by World Health Organization, or those are listed in the Stockholm and Rotterdam Conventions, and paraquat are not used, except in specific situations identified in national Best Practice guidelines. The use of such pesticides shall be minimized and






COMPLIANCE (YES/NO)

eliminated as part of a plan, and shall only be used in exceptional circumstances. Specific Guidances: For 4.6.4: Use of paraquat, as one of the restricted use pesticides, shall refer to the Regulation of the Minister of Agriculture No. 24 year 2011. Operators involve in the use of restricted pesticides must be certified by Pesticide Commission (Komisi Pestisida).

a. Does the company have a complete listing of WHO class 1A, class 1B, and Stockholm or Rotterdam Conventions pesticide?

b. Is there a policy, procedure or management plan committing to minimise and eliminate use of these pesticides and paraquat?

c. Are there records of minimisation of pesticides and paraquat use?

d. Where there is the use of the above pesticides or paraquat, has justification in line with national best practice guidelines been documented?

e. Does physical verification of inventory in the chemical store agree back to the inventory records?

Memorandum No. 001/HP/INT/IX/2009

List of Agriculture Minister Regulation No. 1/2007

Memorandum form Estate Manager No. 059/MR/KNC/MAR/16

PT. HSJ already has a list of pesticides that are included in WHO Class 1A (extremely hazardous) 28 types, class 1B (highly hazardous) 56 types and Stockholm Rotterdam convention pesticide. PT. HSJ has also established procedure on safe use of pesticides. Procedure described on safe use of pesticides and selection including minimise and eliminate use of these pesticides and paraquat. PT. HSJ was still using type of pesticide that listed by WHO class 1B (highly hazardous) which is Paraquat diclorida. Implementing of Paraquat diclorida was managed in Memorandum No. 001/HP/INT/IX/2009, dated no 1 September 2009 regarding reduction the use of herbicide containing Paraquat diclorida. The following are monitoring for Paraquat diclorida at PT. HSJ:

Year Total (litre)

KNU KAK

2013 4,337 2,486.00

2014 4,953 3,504.50

2015 7,619 4,084.30

2016 (Nov) 7,324 2,978.80

It was increasing in 2015 from 2014 period because of replanting process and immature plant upkeep.

Yes

4.6.5

(M) Evidence of pesticide application by trained person and in accordance with application guidelines in product label and storage guidelines shall be available. Appropriate safety equipment shall be provided and utilized. All precautions attached to the products shall be properly observed, applied, and understood by workers (see Criterion 4.7) Specific Guidance :






COMPLIANCE (YES/NO)

For 4.6.5: Requirement pertaining to Personal Protected Equipment (PPE) shall refer to the Regulation of the Minister of Manpower No.8 year 2010 regarding PPE and Material Safety Data Sheet. Use of pesticides must follow guidance stated on the product’s label. If there are gaps between the use of pesticides and the guidance, documented justification should be provided,

SAI Global auditor’s note: - Conducting interviews on

sprayers, foreman, assistant, and a pesticide warehouse clerk associated with the diluting process, mixing, PPE washing. Ensured a consistent response from the auditee regarding the process.

- Ensure PPE washing and

sprayers’ room carried out in the

appropriate places.

- Ensure that pesticide warehouse

is equipped with ventilation.

- Eye wash and shower should be

checked for its adequacy, such

as the adequacy of the water

flow, flow direction, the direction

of the exhaust, ergonomic, and

its access.

a. Is there SOP for chemicals/pesticides handling?

b. Is there a training plan and training records for workers who apply or handle pesticides?

c. Is there evidence that training has been conducted in an appropriate language understood by the workers?

Agriculture Policy Manual AA-APM-OP-1100.11-R1

Training Certificate

Risk assessment analysis

There was SOP for chemical / pesticide handling and training workers list at PT. HSJ. It was described chemicals identification, MSDS availability, chemical handling (label and hazard symbol, storage based on hazard nature, use of PPE), and expire chemical handling. It was available in Procedure No. AA-APM-OP-1100.11-R1 The workers from KNU have get the limited pesticide using training from Committee of Fertilizer and Pesticide Supervision, Province of North Sumatera, on 7 October 2014 and valid 5 years. And for KAK the workers have got the training on 15 September 2016. Training certificates were available. Training was conducted in Bahasa Indonesia and covered handling of agrochemical concentrate and spraying method including pesticide hazard. But for new foreman, has not been given that training. Based on interview with foreman, sprayer workers, workers knew handling of the hazards and risks related to chemical used. During interview they used the appropriate safety and application equipment. Dilution and mixing of pesticides process was conducted by pesticides foreman in mixing area besides pesticides warehouse. PPE for dilution and mixing process was available in mixing area.

Pesticide used was accordance with the product label and MSDS that available in chemical store, however some MSDS do not understand by warehouse clerk. Pesticides warehouse was equipped with enough ventilation. Besides pesticides warehouse was provided eye wash and shower for emergency situation.

Based on risk assessment analysis for sprayer activity at Document of KNU-HSJ 2015/2016, PPE for sprayer includes glasses, mask, apron, boot shoes, and long-sleeved shirt and can be easily replaced if damaged with report to foreman or Afdeling staff. The PPEs monitoring was daily conducted by foreman in the each morning.

YES (Major NCR

2016-07) CLOSED






COMPLIANCE (YES/NO)

d. Are pesticides handled, used or applied only by persons who have completed the necessary training?

e. Are the workers involved in chemical handling or application able to demonstrate understanding of the hazards and risks related to chemicals used when interviewed?

f. Are pesticides always applied in accordance with the product label?

g. Are MSDS for pesticides used readily available for easy reference?

h. Is appropriate safety and application equipment provided and used?

i. Is PPE used appropriate according to recommendations in any risk assessments done?

j. Is appropriate PPE provided and used, and can it be easily replaced if damaged?

k. Does the management checked the workers usage of appropriate PPEs?

4.6.6

(M) Storage of pesticides shall be according to recognised best practices. All pesticides containers shall be properly managed according to the existing regulations and or instructions enclosed on the containers (see criterion 5.3). Specific guidance: For 4.6.6: Some regulations regarding pesticides are: a. Government Regulation No. 18 year 1999 regarding Toxic and Hazardous Materials Management b. List of Toxic & Hazardous Materials from specific source, unspecific source, expired chemical, leaked chemical, residue, container, or product disposal which does not comply

with the specification of Government Regulation No. 85 year 1999 regarding changes of Government Regulation No. 18 year 1999 regarding the Management of Hazardous and Poisoned Waste.

c. FAO International Code of Conduct on the distribution and use of pesticides and it guidance and supported by relevant industrial guidance (see Annex 1).






COMPLIANCE (YES/NO)

d. Regulation of the Minister of Agriculture No. 01/ Permentan/OT.140 /1/2007 regarding List of Banned and Restricted Pesticide (based on active ingredients). e. Regulation of the Minister of Agriculture No. 24/Permentan/SR.140/4/2011 regarding Requirement and Mechanism to Register Pesticide. f. Stockholm Convention regarding Consistent Organic Pollutant which had been ratified with Act No. 19 year 2009 g. Guidance for Advancement of Pesticides usage, Directorate General of Infrastructure and Facilities, Ministry of Agriculture (2011)

SAI Global auditor’s note: Utilization jerry can for placing the same poison is still allowed. If using for other purposes, it must obtain permission from the relevant (minimum from Environmental agency)

a. Has the SOP for pesticide storage been documented and implemented?

b. Are all pesticides stored according to recognised best practices?

c. Is there evidence that empty pesticide containers are properly stored and disposed off and not used for other purposes?

d. Is there evidence observed in the field that pesticide containers are indiscriminately disposed (in dump site) or used for other purposes, .e.g. as waste containers, flower pots?

Documented procedure (AA-KL-06-EFP) Handling Hazardous Wastes.

Documented procedure (AA-APM-OP-1100.11-R1) regarding pesticide application

Field observation at central warehouse and division warehouse include spraying activities at estate operation

Pesticides were stored in the determined area separated from fertiliser and other chemicals. Pesticides storage was provided in each Division. Pesticides storage was locked areas with limited access. The storage was ventilated through cross flow ventilation. MSDS and hazard symbol label were provided nearby of pesticides. Emergency shower and eyewash were also provided to anticipate in case of an emergency of chemical handling. PPE for handling of chemicals were provided including boots, apron, safety glass, respiratory mask and hand gloves. The possible spill was managed. Secondary containment was provided around the pesticides storage area. Spill kit was also provided in the area. EHS patrol was regularly performed monitor possible spill. All empty pesticides containers were triple rinsed and collected in the temporary storage of hazardous waste. Empty pesticides container was stored in Hazardous Waste Storage, however there are still some used for anything else. Pesticides containers were transported by authorised transporter, PT Shali Riau Lestari. Records of pesticides containers quantity were evident. Liquid waste from pesticides was reused for the next spraying applications.

YES (Major NCR

2016-08) CLOSED

4.6.7 Application of pesticides shall be by proven methods that minimise risk and negative impacts.

a. Is there work instruction for pesticide application?

b. Is there training provided on work instruction including risk and impacts of pesticide applications?

AA-APM-OP-1100.08-R1 Weeding Control

AA-APM-OP-1100.10-R1 Pest & Diseases Control

AA-APM-OP-1100.11-R1 Management Pesticides

Training and dissemination

Pesticide application was described in AA-APM-OP-1100.08-R1 Weeding Control, AA-APM-OP-1100.10-R1 Pest & Diseases Control and AA-APM-OP-1100.11-R1 Management Pesticides. Training and dissemination on work instruction including risk and impacts of pesticide applications has been performed by the organization regularly. Training and dissemination records were sighted. Site visit in KNU and KAK has been done to observe the spraying and

Yes






COMPLIANCE (YES/NO)

record

Field observation to spraying activity

pesticide application in field. Interview with spraying workers were evident that all of them has a good knowledge regarding the pesticide usage and its material usage and toxicity. All the workers have used the personal protective equipment meet with the safety rules and work instruction such as: Apron, safety goggles, mask, hand gloves and safety shoes. All precautions attached to the products properly observed, applied, and understood by workers. Mandor (Supervisor) as person in charge to check the workers usage of appropriate PPEs.

4.6.8 (M) Pesticides may only be applied aerially where there is a documented justification. Surrounding communities shall be informed of impending aerial pesticide applications with all relevant information within reasonable time prior to application

a. Has aerial spray been applied? If yes, is there documented justification?

b. Is the impact and risk associated with aerial application documented and made available?

c. Are the identified affected communities informed of impending aerial pesticide applications with all relevant information within reasonable time prior to application?

Not Applicable There was no the pesticides aerially applied. N/A

4.6.9 Evidence of training on handling pesticide for workers and scheme smallholder (if any) shall be available

a. Has the company provided information materials on pesticide handling to all employees and associated smallholders (if any) (see Criterion 4.8)?

b. Is there evidence of periodic training (in appropriate language) of employees and associated smallholders on pesticide handling?

Training program and realization

Training certificate Foreman book

There was no smallholder associated with Negri Lama II Mill, PT. HSJ. PT. HSJ has provided information materials on pesticide handling to all employees. Training and dissemination on work instruction including risk and impacts of pesticide applications has been performed by regularly organization. Training and dissemination records were sighted. However there is non-conformity related to training as mentioned in indicator 4.6.5. Site visit at KNU and KAK has been done to observe the spraying and pesticide application in field. Interview with spraying workers were evident that

YES (Major NCR

2016-07) CLOSED






COMPLIANCE (YES/NO)

Note: Interview with workers and smallholders on their knowledge and skills in pesticides handling.

all of them has a good knowledge regarding the pesticide usage and its material usage and toxicity. All the workers have used the personal protective equipment (PPE) meet with the safety rules and work instruction such as: apron, safety goggles, mask, hand gloves and safety boot. All precautions attached to the products properly observed, applied, and understood by workers. Checking the workers usage of appropriate PPEs is daily conducted through Foreman Book.

4.6.10 Proof that pesticide waste has been handled as per legal regulations and understood by worker and manager, shall be demonstrated

SAI Global auditor’s note: To verify the mixing pesticide workers, pesticide packaging washers, and a warehouse clerk TPS B3 waste associated with the management of used pesticide containers. How to storage, the washing process, the used water after washing, etc.

a. Is there an SOP for proper disposal of waste material?

b. Is there training provided to workers and managers on proper waste disposal?

c. Is there evidence of implementation of proper ways for waste disposal by the company?

Documented procedure (AA-KL-06-EFP) Handling Hazardous Wastes.

Documented procedure (AA-APM-OP-1100.11-R1) regarding pesticide application

Field observation at central warehouse and division warehouse include spraying activities at estate operation

The training list of attendance and training material

Based on interview with foreman, sprayer workers, workers knew handling of the hazards and risks related to chemical used. During interview they used the appropriate safety and application equipment. Dilution and mixing of pesticides process was conducted by pesticides foreman in mixing area besides pesticides warehouse. PPE for dilution and mixing process was available in mixing area.

All empty pesticides containers were triple rinsed and collected in the temporary storage of hazardous waste. Pesticides containers were transported by authorised transporter, PT Shali Riau Lestari. Records of pesticides containers quantity were evident. Liquid waste from pesticides was reused for the next spraying applications.

Training/briefing regarding disposal of waste material has been conducted to all workers and staffs. Based on interview with workers, they understood the disposal of waste material.

NO (Minor NCR

2016-09) OPEN

4.6.11 (M) Annual medical records of pesticide operators, and follow-up treatment of medical results, shall be available






COMPLIANCE (YES/NO)

a. Is there an updated list of pesticide operators?

b. Is there records of annual medical surveillance of pesticide operators?

c. Is there medical and treatment records of all pesticide operators?

Presensi (attendance) of pesticides operators

Last medical check-up conducted on period June and November 2016 by third party laboratory (Gatot Subroto Medan)

The periodical medical check-up was conducted for all spraying operators by third party laboratory (Gatot Subroto Laboratory Medan) include the package of cholinesterase, spirometry, urine and bloods examination. List of pesticides operator was shown and updated periodically for all estates. Specific health surveillance has been performed on for pesticide operators. The surveillance was planned to be conducted once in a year. Reports of the health surveillance for all workers were available. The recommended actions were recorded and reported to estate manager. The records were sighted; last medical check-up conducted on period November 2016 for Aek Kuo estate with 110 operators and 24 personnel for KNU estate. Diagnoses Cards for all pesticides operator were available. The abnormal/suspected patient will be followed up by company doctor. The medical specialist and company doctor will determine whether including occupational illness. The further investigation will be done by the company to ensure that the patients are proper to do the job normally. All results raised from actions taken were maintained properly. Socialization of health surveillance results have been conducted to the workers.

Yes

4.6.12 (M) Records shall be available to show that spraying is not conducted by pregnant or breast-feeding women.

a. Is there a policy statement preventing pregnant and breast-feeding women from handling pesticides?

b. Is there a lists of female workers handling pesticides available?

c. Does the company have a system to identify pregnant and breast-feeding women?

• Company Policy dated 1 December 2014

• Field observation and interview with sprayer workers

• Interview with workers union and committee gender on 21 - 22 December 2016

Policy related to prevent pregnancy and breastfeeding women from handling pesticides has been described in the Company Policy.

List of female workers are available and include female workers related to pesticide as well as worker's age can be identified.

Identification of pregnancy and lactating mothers performed by a clinical nurse. And result was recorded. And based on the medical records of nursing there is no evidence that pregnant and lactating women work in handling pesticides. When are pregnant and lactating women, the women workers will be transferred to other jobs.

YES






COMPLIANCE (YES/NO)

d. Is there evidence showing that pregnant and breast-feeding women are not allowed to handle pesticides?

Based on interview with sprayers, committee gender and worker union said that it’s prohibited for pregnant and breast-feeding women working as fertilizer and sprayer or other work that related to chemical compounds.

4.7

An occupational health and safety plan is documented, effectively communicated and implemented. Guidance: Growers and millers should ensure that the workplace, machinery, equipment, transport and processes under their control are safe and without undue risk to health. Growers and millers should ensure that the chemical, physical and biological substances and agents under their control are without undue risk to health, and appropriate measures are taken if needed. All indicators apply to all workers regardless of status.

The health and safety plan should also refer to the Government Regulation No. 50 year 2012 regarding Application of Occupational Health and Safety Management System.

4.7.1 (M) A health and safety policy shall be in place. A health and safety plan shall be documented and implemented, and its effectiveness monitored.

a. Is there a health and safety policy in place?

Is it written in an appropriate language?

Has the policy been approved by an authorized personnel and dated?

Does the policy cover mitigation of risks to workers health and safety at all workplace activities?

Are the workers aware of and understand the policy?

b. Is there a health and safety plan in place?

Does the plan include targets for improving occupational health and safety?

Does the plan reflect guidance provided in the ILO Convention

OHS Policy (dated 24 November 2015, approved by Managing director)

MPM (Mill Policy Manual)

APM (Agricultural Policy Manual)

OHS Objectives and programme period 2016 and 2017

Site visit observation to estate and mill

Documented policy in Bahasa Indonesia related to occupational health & safety (OHS) was established and integrated to company policy also approved by Managing Director dated November 24th 2015 that consists of: compliance to regulations, implement and monitoring OHS management system, setting objective and target, etc. The socialization of its policy by provide banner, displayed at several area within office and buildings also by conduct induction to employees. Several documented procedures related to OHS aspects were integrated within the MPM (Mill Policy Manual) and APM (Agricultural Policy Manual). There were also separated OHS Management systems Procedures and records established for operational activities that integrated with Environmental management system since the company certified with ISO. The objectives and programmes related to health and safety were established for each estate; includes: to reduce the number of accidents and 5S programme; safety meetings and briefings for all employees and contractors; safety inspections. The objective and programmes for mill, includes: reduce the number accidents; preventive maintenance programme; PPE provisions and implementation of health surveillance. Within the OHS objective and programmes was included the time frame; person in charge and cost estimation. The monitoring of each objectives and programmes were

YES (Major NCR

2016-10) CLOSED






COMPLIANCE (YES/NO)

184 (see Annex 1)?

c. Is there evidence of implementation of the plan?

d. Is the effectiveness of the health and safety plan monitored?

e. Is the health and safety plan made publicly available?

f. Is there an action plan if targets are not achieved?

conducted periodically by the person in charge. Evidences were sighted for several OHS programmes / OHS Management system manual, such as: Medical check-up for mill operators was conducted for period November-December 2016 by third party laboratory (Gatot Subroto Medan); the packages include spirometry, audiometry and urine/bloods laboratory. The OHS monitoring and measurement was conducted periodically twice within a year, records were sighted for period July – December 2016 include the measurement of noise, vibration and temperature, so far the results were within the threshold limit values. Several mandatory PPE are available by the organization to the employees and visitors such as: helmet, safety shoes, ear plugs, ear muffs and respirators. Also there were deployed several PPE symbols at the at risk areas. It was also several working tools and machineries that utilized at mills and estate are equipped with safety devices, such as knives cover that using by harvester and also pressure release valve at mill processing machineries. Several tools and equipment that regulates within the law are already certified and inspected by local government ministry of manpower (Disnaker Labuhan Batu Regency), such as: pressure vessels, lifting equipment, electricity installation, etc.

4.7.2

(M) A documented risk assessment shall be available and its implementation shall be recorded. Specific Guidance: For 4.7.2: All precautions attached to products shall be properly observed, understood, and applied.

SAI Global auditor’s note: - HIRA verify that include:

Routine and non-routine

activities that exist in the

organization

All activities within the scope

of work (contractors and

visitors)

All behaviour, capabilities,

and the human factor

Risk analysis (Period September 2016)

The quantitative method of risk analysis was conducted for all activities at Mill and Estate. The mills risk analysis was covered activities such as: transportation, weighbridge receiver, FFB sorter, loading ramp, transfer carriage, sterilizer, tippler, thresher, press, clarifier, engine room, water treatment, effluent plant, workshop, warehouse, diesel tank, laboratory, offices and traffic activities. While the estates risk analysis were covered activities such as: Replanting, Loading FFB, estate maintenance, fertilizer, pesticides & herbicides, harvesting, workshop activities at traksi and also warehousing. Risk analysis covers emergency drill activities and contractor’s processes and activities such as replanting, estate maintenance, mill maintenance, FFB transportation, and upkeep activities.

Yes






COMPLIANCE (YES/NO)

External influence

(earthquake, flood, tsunami,

etc)

External activities under the

control of the organization

Infrastructure, materials, and

proper work equipment

provided the organization or

from external party

Changes in the organization

either changes in activity or a

material change

The modifications include

temporary changes impacting

on operations, processes,

and activities

Compliance with regulations

- Geographic limits used for HIRA

identification HIRA as the extent

of HGU

- HIRA should be equipped with

the issue date and be reviewed

regularly

- To verify the implementation of the HIRA through measuring and monitoring activities, inspection, and internal audits conducted regularly (1x / year).

a. Have risk assessments been conducted for all operations where health and safety is an issue?

b. Does the risk assessment cover all

According to the procedure, at least OHS risk assessment document must be reviewed once a year and/or when incident happened will consider as review agenda. OHS risk assessment records 2016-2017 were sighted for all Mill and Estates.

The analysis method were described within the documented instruction that analysis was considered frequency of hazard and consequences of risks that summarized the risk level from low risk to extreme risks. Within the risk analysis was also considered the hierarchy of control to take action of risk control such as elimination, substitution, engineering, administrative and PPE. Action plan was developed as followed up the existing high risk in order to reduce to lowest residual risk analysis.






COMPLIANCE (YES/NO)

the organization’s processes and activities?

c. If any accidents had occurred, were these included in the risk assessments with action plans to prevent further recurrence?

d. Have the procedures and action plans been documented and implemented to address the identified issues?

e. Have all precautions attached to products been properly observed and applied to the workers?

4.7.3

(M) Records of Occupational Health and Safety (OHS) program (see 4.8) and Personal Protective Equipment (PPE) training in accordance with the result of hazard identification and risk analysis shall be available to all workers. Specific Guidance: For 4.7.3: Adequate and appropriate Personal Protective Equipment (PPE) shall be available to all workers at the workplace based on the result of Identification of Sources of Hazard and Risk Control including all potentially hazardous operations, such as the use of pesticides, operating machinery, land preparation, harvesting and if it is used, burning.

SAI Global auditor’s note: Performing verification of PPE in the

organization, starting from:

• Identifying the needs and

requirements of PPE can be in

the form of a matrix, WI, risk

assessment, program, etc.

• amortization period APD

• the type of PPE used

• monitoring the stock in the

warehouse

• verification of the field condition

Training Programme 2016-2017

Training attendance

Licenses/certificates of trainings (licenses for boiler operator, licence for operator of generator set, licence of heavy equipment operator, pesticide training for sprayers, etc.)

Site visit observation to estate and mill

OHS training has been programmed and provided appear balanced with OHS hazard and risk at Mill and Estates. Basic OHS training performed internally by safety officer in charge at mill and estate, the training record and programme related to OHS were sighted and verified during this audit, e.g. licenses for boiler operator, licence for operator of generator set, licence of heavy equipment operator, pesticide training for sprayers, etc. The PPE for each activity has been established, e.g. working at mill, working at generator set, welder, working at laboratory, harvester, sprayer, fertilizer storage, chemical storage, etc. The distribution list of PPE was kept by supervisors (“mandor”) Observation during this audit generally concluded that PPE has been well provided and implemented. It was observed in spraying activity, workers in Block B14F KNU Estate were interviewed during this audit and generally they understood the risk of their work and the purpose of using PPE. Several

Yes






COMPLIANCE (YES/NO)

through interviews with workers,

foremen, and a warehouse clerk

a. Are all workers involved in the operation appropriately trained in safe working practices (see Criterion 4.8)?

b. Are OSH training programs and training records available and conducted by qualified persons?

c. Is adequate and appropriate protective equipment available to all workers at the place of work to cover all potentially hazardous operations, such as pesticide application, machine operations, and land preparation, harvesting and, if it is used, burning?

d. Is PPE provided to workers and replaced when damaged?

Does the organization maintain a list of PPE distribution?

Are workers observed wearing appropriate PPE?

mandatory PPE are available by the organization to the employees and visitors such as: helmet, safety shoes, ear plugs, ear muffs and respirators. Also there were deployed several PPE symbols at the at risk areas.

4.7.4

(M) The responsible person(s) for occupational health and safety shall be identified and there shall be records of periodical meetings on health and safety issues Specific Guidance: For 4.7.4 : Workers shall be represented in the Advisory Committee for Occupational Safety and Health (P2K3) based on the Regulation of the Minister of Manpower No. 4 year 1987.






COMPLIANCE (YES/NO)

a. Has the company identified the responsible person/persons to implement OSH?

b. Are meetings between the responsible persons and workers conducted on a regular basis, or as required by law, if any?

c. Are minutes of meeting recording attendees and issues discussed available?

d. Are concerns of all parties about health, safety and welfare discussed at these meetings?

Note to Auditor: Interviews with workers reflect compliance to a-d above.

Approval letter from local authority regarding EHS committee (P2K3)

Records of OHS Committee periodical meeting

KNU (North Negeri Lama Estate)

The structure of OHS Committee (P2K3) was established and approved by local authority (Labuhan Batu Regency) as approval letter No.Kep.398/P2K3/DSTKT-4/2016 dated 08th March 2016, that the safety expert/AK3U (Abdul Azis Manik) acts as the secretary. Meetings of OHS committee (P2K3) were conducted monthly and attended by all member and chairman, last minutes of meeting dated 9th December 2016 was sighted, with agenda to reduce the number of incidents. Several concerns were discussed such as: PPE, accident and incidents, and socialization of risk assessment. The actions were monitored for realisation and reported to management and local authority as quarterly report as required by regulation. Aek Kuo Estate

The structure of OHS Committee (P2K3) was established and approved by local authority (North Labuhan Batu Regency) as approval letter No.Kep.566/520/DSTK/P2K3/ 2016 dated 27th April 2016, that the safety expert/AK3U (Sigit Sukoco) acts as the secretary. Meetings of OHS committee (P2K3) were conducted monthly and attended by all member and chairman, last minutes of meeting dated 9th December 2016 was sighted, with agenda to reduce the number of incidents. Several concerns were discussed such as: PPE, reduce the number of accident and incidents, and socialization of risk assessment. The actions were monitored for realisation and reported to management and local authority as quarterly report as required by regulation. PND (Negeri Lama-II Mill)

The structure of OHS Committee (P2K3) was established and approved by local authority (Labuhan Batu Regency) as approval letter No.Kep.307/P2K3/DSTKT-4/2016 dated 9th November 2016, that the safety expert/AK3U (Ismail) acts as the secretary. Meetings of OHS committee (P2K3) were conducted monthly and attended by all member and chairman, last minutes of meeting dated 09th November 2016 was sighted, with agenda regarding the safety inspection and housekeeping at

Yes






COMPLIANCE (YES/NO)

mill. Several concerns were discussed such as: PPE, reduce the number of accident and incidents, and socialization of risk assessment. The actions were monitored for realisation and reported to management and local authority as quarterly report as required by regulation.

4.7.5

A procedure for emergency and work accident shall be available in Indonesian Language; and the workers, who have attended First Aids training, are available in the working areas. Specific Guidance: For 4.7.5: Assigned operatives trained in First Aid should be present in both field and other operations, and first aid equipment shall be available at worksites. Records of all accidents shall be kept and periodically reviewed.

a. Are there SOPs for accidents and emergencies?

Do these cover all major potential emergencies, such as, but not limited to fire, chemical spillage, and potential natural disasters specific for the region, e.g. earthquakes, volcanoes, etc.?

Are accidents investigated and action taken to prevent recurrence?

Are accident records provided to the local authority in accordance with local legal requirements, if any?

Available in the appropriate language of the workforce?

b. Are the instructions on emergency procedures clearly understood by all

Documented procedures related to emergency response (AA-EMS-447-PR)

Emergency response team form (AA-447-01-LT)

Accident reporting and investigation form of RKK (AA-SOP-OP-1400.02)

Incident statistics quarter report to local authority (Labuhan Batu Regent)

There were several documented procedures related to emergency response in local language Bahasa Indonesia. The emergency conditions have been identified including general fire, land fire, chemical spillage and earth quake. The procedure described the roles and responsibilities of each emergency response team include the mechanism how to conduct medical evacuation to near hospital/local health centre, the emergency contact number of each internal emergency team and external related parties such as public fire station at local area Kabupaten Labuhan Batu and Public health centre “Puskesmas Labuhan Batu” were also available. The composition of emergency response team was established at forms (AA-447-01-LT) consist of ERT commander, head of transport and logistics and also several fire fighters and first aider. Regarding accident reporting and investigation, it was available the form of RKK (AA-SOP-OP-1400.02) to conduct the reporting and investigation of accidents, which within the forms are described the accident chronology, cause and impact of the accident also to find the root causes of the accident happened and formulized the corrective and preventive action. The incident statistics were reported quarterly within a year to local authority (Labuhan Batu Regent) by safety officer obtained from supervisors (mandor) and clinics. The emergency kits such as first aid box and emergency shower/eyewash were available at mill and several locations at estate. First aid kits were

NO (Minor NCR

2016-11) OPEN






COMPLIANCE (YES/NO)

workers?

c. Are assigned operators trained in First Aid present in both field and other operations?

d. Is there records of training of the first aiders?

e. Is first aid equipment available at worksites? Is the equipment available during conduct of field manual work?

e. Are first aid kits adequately stocked and regularly checked in accordance with local legal requirements?

f. Are records of all accidents kept and periodically reviewed for continuous improvement?

regularly checked as checklist was sighted. Mill and Estate was supported with one clinic centre and first aid room at each division office. The group leader (mandor) was provided with first aid kits. Certified first aiders were also available as part of emergency team structure.

4.7.6 All workers shall be provided with medical care, and covered by accident insurance (see criterion 6.5.3).

a. Is there evidence that all workers are provided with medical care (refer to Criterion 6.5.3), and covered by accident insurance by the company? For contract workers, the contract between the company and the contractor shall be in compliance.

b. For accidents that have occurred, is there evidence that the affected workers received appropriate medical treatment, and was able to claim and receive compensation under the insurance policy (if

Site visit observation/interview to estate clinic

The BPJS Ketenagakerjaan monthly payment for period August - November 2016.

The insurance were provided for all employees (include permanent and outsources) that mandatory from government (BPJS Ketenagakerjaan); the packages for accident insurance (JKK) were 0.54 in percentages. The monthly payments were evident for period August – November 2016. However it was not all employees are covered within the insurance as it is to be non-conformance within this audit report. It also was found in previous audit (Transfer Audit). Because of repeated NC then this time upgraded to Major NC

Major Non-conformances 2016 - 12 :

Aek Kuo Estate

Not all workers are covered by accident insurance (BPJS Ketenagakerjaan). There were only 211 from 281 workers covered by accident insurance as seen

NO (Major NC 2016- 12)






COMPLIANCE (YES/NO)

relevant)?

c. Is there evidence that the insurance policies are valid?

by October 2016 insurance payment.

4.7.7

Occupational injuries shall be recorded using Lost Time Accident (LTA) metrics. Specific Guidance For 4.7.7: Lost Time Accident requirements should refer to Decree of the Minister of Manpower and Transmigration No. 609 year 2012 regarding Guidance to Solve Working Accident Case and work-related Illness.

a. Are occupational injuries recorded using Lost Time Accident (LTA) metrics?

Incident statistics quarter report to local authority (Labuhan Batu Regent)

KNU (North Negeri Lama Estate)

The incident statistics were reported quarterly within a year to local authority (Labuhan Batu Regent) by safety officer (Mr. Azis) obtained from supervisors (mandor) and clinic. Records sighted for period year 2016, include the investigation report. The data of Lost time accident for estates have been shown and the records were properly maintained. Sample of accident report and investigation were taken in 6th December 2016, for upkeep worker (Anwar Hanafi) which his eyes exposed the grass while doing upkeep activities. The result of accident investigation can be shown. The number of lost times and accident statistics as presented below: Fatality = 0; Permanen disabled = 0; Lost time = 10; Property damage = 0; Medical aid = 6; First aid case = 8. Aek Kuo Estate

The incident statistics were reported quarterly within a year to local authority (Labuhan Batu Regent) by safety officer (Mr.Sigit) obtained from supervisors (mandor) and clinics. Records sighted for period year 2016, include the investigation report. The data of Lost time accident for estates have been shown and the records were properly maintained. The number of lost times and accident statistics as presented below: Fatality = 0; Permanen disabled = 0; Lost time (days) = 10; Property damage = 0; Medical aid = 10; First aid case = 30. PND (Negeri Lama II Mill)

Yes






COMPLIANCE (YES/NO)

The incident statistics were reported quarterly within a year to local authority (Labuhan Batu Regent) by safety officer (Mr. Ismail). Records sighted for period year 2015, include the investigation report. The number of lost times and accident statistics as presented below: Fatality = 0; Permanen disabled = 0; Lost time (days) = 4; Property damage = 0; Medical aid = 0; First aid case = 0.

4.8

All staff, workers, smallholders and contract workers are appropriately trained. Guidance: Workers should be adequately trained on: the health and environmental risks of pesticide exposure; recognition of acute and long-term exposure symptoms including the most vulnerable groups (e.g. young workers, pregnant women); ways to minimise exposure to workers and their families; and international and national instruments or regulations that protect workers’ health.

The training programme should include productivity and best management practice, and be appropriate to the scale of the organisation.

Training should be given to all staff and workers by growers and millers to enable them to fulfil their jobs and responsibilities in accordance with documented procedures, and in compliance with the requirements of these Principles, Criteria, Indicators and Guidance.

Contract workers should be selected for their ability to fulfil their jobs and responsibilities in accordance with documented procedures, and in compliance with the requirements of the RSPO Principles, Criteria, Indicators and Guidance.

Growers and millers should demonstrate training activities for schemes smallholders who provide Fresh Fruit Bunches (FFB) on a contracted basis.

Workers on smallholder plots also need adequate training and skills, and this can be achieved through extension activities of growers or millers that purchase fruit from them, This training may be conducted through smallholders’ organizations, or through collaboration with other institutions and organizations (See Guidance on Scheme Smallholders’, July 2009)

The contract workers in Indonesia refer to the Fixed Term Contract (PKWT) and Non-fixed Term Contract (PKWTT) based on the Decree of the Minister of Manpower No. 100 year 2004; and the Regulation of the Minister of Manpower & Transmigration No. 19 year 2012 regarding Requirements for Transfer of Parts of Work to Other Company(ies).

4.8.1 (M) Records of training program related to the aspects of RSPO Principles and Criteria shall be available.






COMPLIANCE (YES/NO)

a. Does the company maintain a list of staff, workers, smallholders and contract workers whom training must be provided to?

b. Is there a formal training programme in place that covers all aspects of the RSPO Principles and Criteria? Does the formal training program include:

Regular assessment of training needs of all staff, workers, smallholders and contract workers;

Training for workers on smallholder plots;

Documentation of all the training assessment needs, formal training conducted and the list of participants attending these formal training;

Does the training for workers cover, at minimum, to the following:

o The health and environmental risks of pesticide exposure;

o recognition of acute and long-term exposure symptoms including the most vulnerable groups (e.g. young workers, pregnant women);

o ways to minimise exposure to workers

Training programme 2016 – 2017

Training records (attendance list and certificates)

Site visit observation to estate and mill and interviews with all employees and contract workers

There was established training programme that feedbacks from regulations and basic competence as training needs identification. All functions and levels included contract employees within the organisation were covered by the training programme. The training needs identified appear sufficient and complete, this including training related to OHS, environmental, social, training required by regulations, training related to operation of Mill and Estates. Training programme 2016 and 2017 were sighted, the training programme was established based on the training needs identification. Realization of training programme 2016 were sighed for all staff, workers and contract workers, includes:

Sustainability awareness (13 October 2016); Hazardous waste handling (29 April 2016); Safety awareness (28 Mei 2016); HCV awareness (18 November 2016); Fire safety training (18 November 2015), First Aider (21 June 2016).

Yes






COMPLIANCE (YES/NO)

and their families; o International and

national instruments or regulations that protect workers’ health; and

o Productivity and best management practice.

Note to auditor: To interview staff, workers, smallholders and contract workers to verify that the training has been conducted effectively.

4.8.2 Records of training for each employee shall be maintained.

a. Are training records maintained for each employee?

Training attendance

Individual training history

The system to record personal training was established-in the attendance record; the training which has been completed by each person was recorded and updated.

Yes



PRINCIPLES 5: ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY


CHECKLIST OBSERVATIONS &

OBJECTIVE EVIDENCE SUMMARY OF FINDINGS FOR EACH INDICATOR

COMPLIANCE (YES/NO)

5.1

Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continual improvement. Guidance: Report on environmental management and monitoring may be in the form of RKL & RPL reports in accordance with the provisions of AMDAL and/or other documents as required in the Environmental Management System (ISO 14000). For environmental aspects which have not yet been included in the Environmental Impact Analysis document (in accordance with government regulation), such as Greenhouse Gas, High Conservation Value, a study may be conducted separately and in accordance with the requirements of the RSPO Principles and Criteria.

If there are impacts identified, that may change the on-going operations, the company should implement corrective actions on the operational practices within this specified period. Document of environment impact assessment is the environment document based on the existing regulations, such as: a. Environmental Impact Assessment (Analisis Mengenai Dampak Lingkungan Hidup/AMDAL) for plantation with areas of > 3000 Ha b. Environmental Management Effort (Upaya Pengelolaan Lingkungan Hidup/UPL) and Environmental Monitoring Effort (Upaya Pemantauan Lingkungan Hidup/UKL) for plantation

with areas of < 3000 Ha. c. Environmental Management Document (Dokumen Pengelolaan Lingkungan Hidup/DPLH) d. Environmental Evaluation Document (Dokumen Evaluasi Lingkungan Hidup/DELH) e. Environmental Information Performance (Penyajian Informasi Lingkungan Hidup/PIL) f. Environmental Evaluation Performance (Penyajian Evaluasi Lingkungan Hidup/PEL) g. Environmental Evaluation Study (Studi Evaluasi Lingkungan Hidup/SEL) h. Environment Management and Monitoring Document (Dokumen Pengelolaan dan Pemantauan Lingkungan Hidup/DPPL) i. Declaration Letter for Managing and Monitoring Environment (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup/SPPL) j. And others recognised by the government.

Bearing in mind the potential impacts of the development activities to the environment, it is important for the following environmental characteristics to be taken into consideration: a. Environment components where their functions will be sustainably preserved and protected, particularly:

Protected forest, conservation forest, and biosphere reserve;

Water sources;

Biodiversity;

Air quality;

Natural and cultural heritage;

Environmental comfort;

Cultural values in harmony with the environment






COMPLIANCE (YES/NO)

b. Environment components which may structurally change and these changes are considered significant by the communities surrounding the operational areas, such as:

Ecosystem function(s);

Land ownership and tenure;

Job and business opportunities;

Community’s standard of living;

Public health The company shall submit the required periodical environmental management implementation and monitoring report to the relevant authorities.The company is responsible for providing sufficient objective evidence to the audit team demonstrating full compliance to the Environmental Impact Assessment (AMDAL) requirement covering all aspects of plantation and mills operations, as well as incorporating all changes recorded over that period of time. The environmental impact assessment should cover the following activities, where they are undertaken: a. Building new roads, processing mills or other infrastructure; b. Putting in drainage or irrigation systems; c. Replanting and/or expansion of planting areas; d. Management of mill effluents (Criterion 4.4); e. Clearing of remaining natural vegetation; f. Management of pests and diseases by controlled burning (referred to clause 11 of Government Regulation No. 4 year 2001 (Criteria 5.5 and 7.7). Impact assessment can be a non-restrictive format e.g. ISO 14001 EMS and/or EIA report incorporating elements spelt out in this Criterion and raised through stakeholder consultation. Environmental impacts may be identified on soil and water resources (criteria 4.3 and 4.4), air quality (criterion 5.6), greenhouse gases calculation analysis, biodiversity and ecosystems, and people’s amenity (Criterion 6.1), both on and off-site. Stakeholder consultation has a key role in identifying environmental impacts. The inclusion of consultation should result in improved processes to identify impacts and to develop any required mitigation measures. For smallholder schemes, the scheme management has the responsibility to undertake impact assessment and to plan and operate in accordance with the results (refer to ‘Guidance on Scheme Smallholders’, July 2009 or its endorsed final revision). The Strategic Environment Study Result (KLHS) by the government, shall be placed as main consideration while conducting replanting Regulations related to the environment documents, are such as: 1. Government Regulation (PP) No. 27 of 2012 regarding Environment Permit 2. Regulation of the Minister of EnvironmentNo. 13 year 2010 regarding Environment Management and Monitoring Effort (UKL-UPL) and Environment Management and Monitoring






COMPLIANCE (YES/NO)

Effort (UKL-UPL) and Declaration Letter for Managing and Monitoring Environment (SPKL) 3. Regulation of the Minister of Environment No. 5 year 2012 regarding Environment Evaluation Document (DELH) 4. Regulation of the Minister of Environment No. 14 year 2010 regarding Environment Management and Monitoring Document (DPPL) 5. Regulation of the Minister of Environment No. 12 year 2007 regarding Environment Management and Monitoring Document for Business and or Activities, with Absence of

Environment Management Document. 6. Regulation of the Minister of Environment No. 5 year 2012 regarding Types of Business Obliged to Have AMDAL 7. Regulation of the Minister of Environment No. 17 year 2012 regarding Involvement of Community and Information Transparency in the AMDAL Process 8. Regulation of the Minister of Environment No. 8 year 2006 regarding Guidance for AMDAL Preparation 9. Decree of the Head of Bapedal No. No. 299 of 1996 regarding Technical Guidance of Social Aspects Study in Establishing AMDAL 10. Regulation of the Minister of Environment No. 11 year 2008 regarding Competence Requirements for AMDAL Preparation Documents and Requirements for Training Institutions in

Conducting Training for AMDAL competence. 11. Regulation of the Minister of Environment No. 15 year 2013 regarding Measurement, Reporting and Verification for Mitigation Action of Climate Change In the Regulation of the Minister of Environment No. 14 year 2010, the environment document is a document covering environment management and monitoring, and may be in the form of AMDAL, Environment Management and Monitoring Efforts (UKL-UPL), Declaration Letter for Managing and Monitoring Environment (SPKL), Environment Management and Monitoring Document (DPPL), Study to Evaluation on the Environment Impacts (SEMDAL), Environment Evaluation Study (SEL), Environment Information Performance (PIL), Environment Evaluation Performance (PEL), Environment Management Document) (DPLH), Environment Management and Monitoring (RKL-RPL), Environment Evaluation Document (DELH), and Environment Audit.

5.1.1 (M) Environmental impact assessment document(s) shall be available.

a. Has an EIA been conducted according to the scope of operation covering at minimum the following:

Building new roads, processing mills or other infrastructure;

Putting in drainage or irrigation systems;

Replanting and/or expansion of planting areas;

Management of mill effluents (Criterion 4.4);

Clearing of remaining natural vegetation;

Management of pests and

Document of ANDAL, RKL RPL #PC.220/383/B/II/1994

AA-EMS-431-PR – Environmental aspect identification and evaluation

Result of evaluation of environmental aspect and impact

Report of RKL RPL Semester I 2016

Receipt note of RKL RPL submission

Impact assessment was documented in document of ANDAL, RKL RPL approved by Department of Agriculture of Republic of Indonesia on 26th of February 1994. Negri Lama II Mill, Negri Lama Utara Estate and Aek Kuo Estate have implemented procedure for identifying environmental aspect and evaluating its impact based on Environmental Management System ISO 14001:2004. The result of environmental aspect and impact identification and evaluation was documented. As required by the procedure, the information of environmental is reviewed and updated annually. Last review and update of environmental aspect and impact register for Negri Lama II Mill, Negri Lama Utara Estate and Aek Kuo Estate was performed on 4 January 2016.

YES






COMPLIANCE (YES/NO)

diseased palms by controlled burning (Criteria 5.5 and 7.7).

b. Has the EIA been conducted and documented according to local requirements?

c. Does the assessment include consultation with relevant stakeholders to identify impacts and to develop any mitigation measures?

Document of environmental impact assessment included: - Building new roads, processing mills or other infrastructure; - Putting in drainage or irrigation systems; - Replanting and/or expansion of planting areas; - Management of mill effluents; - Clearing of remaining natural vegetation; - Management of pests and diseases palms by controlled burning; - Result of stakeholder consultation.

The EIA has been included consultation with relevant stakeholders to identify impacts and to develop any mitigation measures. The consultation result and the mitigation has been state at ANDAL, RKL, RPL documents.

5.1.2 Environment management plan document to prevent negative impacts, its implementation report and revision (if the identification of impact requires changes in current company’s practices) shall be available. The company’s management shall appoint the responsible person(s) for the implementation of the document.

a. Is there an environmental management plan in place?

b. Is the environmental management plan documented to include the following:

Identification of responsible person(s);

Potential impacts from current practices;

Measures to mitigate negative impacts;

Timetable for change (where changes in current practices are required).

c. Has the environmental management plan been implemented?


Receipt note of RKL RPL submission

Implementation of RKL RPL is reported every six months. The report of Semester I 2016 of RKL-RPL was submitted to North Sumatera Province and Labuhan Batu District Environmental Agency, Central of Environmental Management Regional Sumatera and Ministerial Office of Environment on 21 November 2016. RKL-RPL was included the identification of responsible person, potential impact from current parties, Measures to mitigate negative impacts and Timetable for change (where changes in current practices are required

Negeri Lama Dua Mill and estates have ensured that all plan mentioned in RKL RPL or Environmental Management Plan were implemented. Control measure were defined and implemented for ensuring that negative environmental impact were prevented or mitigated. There were several types of control measures defined: engineering control, administrative control and PPE. The implementation of those control measures are monitored during monthly environmental patrol and also round of internal audits.

YES

5.1.3 Environment monitoring plan document, its implementation report, and the corrective plan (if non-conformance arised from the monitoring result) shall be available. This plan is reviewed on two-yearly basis.






COMPLIANCE (YES/NO)

a. Does the plan incorporate a monitoring protocol?

b. Is the monitoring protocol adaptive to operational changes?

c. Is the monitoring protocol implemented to monitor the effectiveness of the mitigation measures?

d. Is the plan reviewed at a minimum every two years to reflect the results of monitoring and where there are operational changes that may have positive and negative environmental impacts?


“Evaluation of Environmental Aspect and Impact PT. Hari Sawit Jaya 2016”

Management Plan and monitoring of environmental impacts documented in RKL (Rencana Pengelolaan Lingkungan) and RPL (Rencana Pemantauan Lingkungan) as monitoring protocol.

Environmental management plans adapted to estate and mill operations change and regulations, if there are changes in the regulations related to operational and environmental, management plan will be reviewed and re-conducted the update to be relevant.

The reporting of RKL/RPL was conducted 6 monthly issued by Head of administration/KTU that consist of the implementation of environment management and monitoring plan include analysis of waste water quality and flow rate also the air emissions measured by third party (Environmental Laboratory). The effectiveness of the outcome from the implementation of environmental management and monitoring was reviewed on the report through the evaluation of compliance, evaluation of trends and evaluation of the effectiveness of management and environmental monitoring.

Whenever there is a material change, changes in operations and regulatory changes the company will revise their environment aspect and impact assessment. Later on, it will updated annually.

YES

5.2

The status of rare, threatened or endangered species and other High Conservation Value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and operations managed to best ensure that they are maintained and/or enhanced. Guidance: This information gathering should include checking available biological records and consultation with relevant government departments, research institutes and interested NGOs if appropriate. Depending on the biodiversity values that are present, and the level of available information, some additional field survey work may be required. Wherever HCV benefits can be realised outside of the management unit, collaboration and cooperation between other growers, governments and organisations should be considered.

Sanctions in the protected wildlife case, may be taken through law enforcement in line with the existing regulations. The company should determine type of sanctions, based upon SOP or policy of the company, considering level of violations (capture, harm, keep, and kill) and category of the species (rare, endangered, and threatened). National regulations related to the protection of habitat and species, such as: 1. Act No. 5 year 1990 regarding Conservation on Biodiversity and its Ecosystems 2. Act No. 16 year 1992 regarding Quarantine for Animals, Fish and Plants 3. Act No. 5 year 1994 regarding Ratification of the United Nations on Convention to Biodiversity






COMPLIANCE (YES/NO)

4. Government Regulation No. 13 year 1994 regarding Wildlife Hunting 5. Government Regulation No. 68 year 1998 regarding Areas of Natural Sanctuary and Natural Conservation 6. Government Regulation No. 7 year 1999 regarding Preservation of Flora and Fauna (List of Protected Flora and Fauna is on the annex). 7. Regulation of the Minister of Forestry No.: P.48/Menhut-II/2008 regarding Guideline of Conflict Resolution between Human and Wildlife 8. Presidential Decree No. 43 year 1978 regarding Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) ratification. Growers need to consider a variety of land management and tenure options to secure HCV management areas in ways that also secure local people’s rights and livelihoods. Some areas are best allocated to community management and secured through customary or legal tenures in certain period. In other cases, co-management options can be considered. Where communities are asked to relinquish rights so that HCVs can be maintained or enhanced by the companies or State agencies, then great care needs to be taken to ensure that communities retain access to adequate land and resources to secure their basic needs; all such relinquishment of rights must be subjected to their free, prior, and informed consent (see Criteria 2.2 and 2.3).

5.2.1

(M) Record(s) on the results of High Conservation Value (HCV assessment) that includes both the planted area and the relevant wider landscape-level considerations (such as wildlife corridors) shall be available Specific Guidance: This information will cover:

Presence of protected areas that could be significantly affected by the grower or miller;

Conservation status (e.g. IUCN status), legal protection, population status and habitat requirements of rare, threatened, or endangered (RTE) species that could be significantly affected by the grower or miller;

Identification of HCV habitats, such as rare and threatened ecosystems, that could be significantly affected by the grower or miller; HCV Identification may be conducted internally (by the company, where the team leader shall be registered in the HCVRN-Assessors Licensed Scheme (ALS), through peer-review by the competent experts, prepared in accordance to the common Guidance for the identification of HCV 2013. If the company has no expert for assessing certain HCV type(s), then it may use the external assessor(s). The HCV assessor team needs to have experience in the assessed ecosystem to minimise inaccuracy risk of the HCV assessment. If possible, each external assessor who comes from outside the assessed areas should cooperate with the local or regional expert(s). The HCV report shall describe the composition and qualification of the assessor team in biological and social aspects.

a. Has a High Conservation Value (HCV) assessment been conducted and cover the following:

Presence of protected areas that could be significantly affected by the grower or miller;

Conservation status (e.g. IUCN status), legal protection, population status and habitat

HCV assessment and analysis of the existence

HCV assessment has been conducted and documented in "Report of Identification and Analysis of the existence of High Conservation Value (HCV) area at Negri Lama Selatan, Central and Utara Estate and Aek Kuo Estate in September 2012 by Faculty of Forestry, Bogor Agricultural University (IPB). All assessors are RSPO approved HCV assessor. Stakeholder consultation was carried out on 12 June 2012, attended by community around from Aek Korsik, Sei Sentang, Kuala Bangka, Sidomulyo, Tanjung Haloban, Selat Besar, Negeri Lama Seberang, Sei Tarolat, and Tanjung Haloban Village. Peer

YES






COMPLIANCE (YES/NO)

requirements of rare, threatened, or endangered (RTE) species that could be significantly affected by the grower or miller.

Identification of HCV habitats, such as rare and threatened ecosystems, that could be significantly affected by the grower or miller;

b. Was the HCV assessment performed by a qualified HCV assessor?

c. Was the HCV assessment performed in consultation with relevant stakeholders?

d. Does the HCV assessment include checking of available biological records?

e. Does the HCV assessment include both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors)?

f. Was the HCV assessment performed in accordance to the latest methodology available at global and national level?

g. Are identified HCVs mapped?

review was conducted by Dr. Kun Kun Jaka Gurmaya in January 2013. Record of HCV Assessment, in the form of a report, including a map of HCV area was available. Besides presenting data and map of HCV area, the report also includes a list of rare and threatened wildlife species from 4 (four) main wildlife groups, such as mammals, birds, herpetic-faunas and fishes. The HCV assessment includes Negri Lama Utara protected area, palm plantation area of Negri Lama Utara, palm plantation area of Negri Lama Central, plant waste pond of Negri Lama Selatan, and palm plantation area of Negri Lama Selatan in accordance with Guidelines of Indonesia HCVs Identification, version on June 2008. Maps of HCV Area in Palm Oil Plantation, PT. Hari Sawit Jaya, Labuan Batu and North Labuan Batu Regency, North Sumatera Province.

5.2.2

(M) Where rare, threatened or endangered (RTE) species or other HCVs are present or affected by the plantation and mill operations, an appropriate measures that are expected to maintain or enhance them shall be implemented through a management plan. Specific Guidance: These measures will include: a. Ensuring that any legal requirements relating to the protection of the species or habitat are met;






COMPLIANCE (YES/NO)

b. Avoiding damage to and deterioration of HCV habitats such as by ensuring that HCV areas are connected, corridors are conserved, and buffer zones around HCV areas are created;

c. Controlling any illegal or inappropriate hunting, fishing or collecting activities, and developing responsible measures to resolve human-wildlife conflicts (e.g. incursions by elephants)

d. Improving HCV, if possible, through management options, such as habitat enrichment.

a. Are HCVs and/or RTEs present?

b. If HCVs and/or RTEs are present, has a management plan containing appropriate measures that are expected to maintain and/or enhance them been prepared? The measures should include the following:

Ensuring that any legal requirements relating to the protection of the species or habitat are met;

Avoiding damage to and deterioration of HCV habitats such as by ensuring that HCV areas are connected, corridors are conserved, and buffer zones around HCV areas are created;

Controlling any illegal or inappropriate hunting, fishing or collecting activities, and developing responsible measures to resolve human-wildlife conflicts (e.g. incursions by elephants).

c. Are the measures contained in the management plan actively implemented to maintain and/or


Conservation Management Plan 2016

Report of HCV Management

HCV assessment results in the area of PT Hari Sawit Jaya was identified of 108 Ha HCV areas, as follows :

HCV / Components HCV Area Area (ha)

HCV 1.2. Critically endangered species

Negeri Lama Utara protection area

106

HCV 1.3. Areas that contain habitat for viable population of endangered, restricted range or protected species

Refer to HCV 1.2 Refer to HCV 1.2

HCV 1.4. Areas that contain habitat of temporary use of species or congregation of species


HCV 2.3. Areas that contain representatives population of most naturally occurring species.


HCV 3. Rare or endangered ecosystem


HCV 4.1. Areas of ecosystem important for the provision of water and prevention of floods for downstream communities.


HCV 6. Areas critical for maintaining the cultural identity of local communities

Cemetery 2

Total 108

YES






COMPLIANCE (YES/NO)

enhance HCV values?

d. Are the HCV values and the presence of RTEs periodically monitored?

e. Are the field inspections conducted regularly to ensure implementation of mitigation plan (especially along areas bordering natural area)?

Based on report of HCV identification, there were status of vulnerable and Endangered IUCN, App II CITES, and Protecting of Government Regulation of No. 7 / 1999, as follows :

a. IUCN - Endangered-Flora; Meranti gembung (Shorea bracteolate Dyer) - Vulnerable-Flora; Siangus (Diospyros oblongifolia), Ramin (Gonystilus

bancanus), and - Vulnerable-Fauna; Lutung simpai (Presbytis thomasi), Beruk (Macaca

nemestrina), Bangau tongong (Leptoptilos javanicus), and Bangau bluwok (Mycteria cinerea)

b. CITES (App II) - Flora; Ramin (Gonystilus bancanus) - Fauna; Kucing kuwuk (Felis bengalensis), Lutung simpai (Presbytis

thomasi), Beruk (Macaca nemestrina), Rangkong badak (Buceros rhinoceros), Kangkareng perut putih (Anthracoceros albirostris), Ular python (Python reticulatus), Biawak (Varanus salvator), and Kobra hitam (Naja sumatrana)

c. PP No. 7 / 1990 - Flora; Pinang Merah (Cystostachys lakka) - Fauna; Kucing kuwuk (Felis bengalensis), Burung madu kelapa

(Anthreptes malacensis), Kipasang belang (Rhipidura javanica), Cekakak belukar (Halcyon smyrnensis), Elang-ular bido (Spilornis cheela), Alap-alap capung (Microhierax fringillarius), Burung madu belukar (Anthreptes singalensis), Elang hitam (Ictinaetus malayensis), Elang tikus (Elanus caeruleus), Elang brontok (Nisaetus cirrhatus), Kuntul kecil (Egretta garzeta), Elang kelelawar (Macheiramphus alcinus), Rangkong badak (Buceros rhinoceros), Undan putih (Pelecanus onocrotalus), Bangau tongong (Leptoptilos javanicus), Bangau bluwok (Mycteria cinerea), Elang-laut perut putih (Haliaeetus leucogaster), Burung madu sepah raja (Aethophyga siparaja), Caladi tilik (Dendrocopsos moluccensis), and Kangkareng perut putih (Anthracoceros albirostris)

There was no water area (river, swamp, and reservoir) as water provider and manage the hydrology and protection area, but PT. HSJ have the land cover was






COMPLIANCE (YES/NO)

peat land, so that conducted the water management to protect of area from fire and flood. Area that important for identification of local communities was cemetery at block of C13. Implementing for HCV management and monitoring PT. HSJ 2016 in accordance with the Conservation Management Plan 2016. Some activities that has been conducted, other between : damage monitoring of protect area, installation of boundary area, installation of area HCV information board include penalties of the UU No. 5/1990, installation of board the ban on hunting, and making of boundary ditch. Other than that, also conducted half-yearly fauna and flora monitoring by Sustainability Officer and Foreman.

5.2.3 Program(s) to socialize the status of protected, rare, threatened or endangered (RTE) to all workers shall be available, including records of appropriate sanction disciplinary measures to any individual working for the company who is found to capture, harm, collect or kill these species.

a. Does the company have policies or rules to protect RTE species?

b. Is there a programme to regularly educate the workforce about the status of the RTE species?

c. Is there evidence or action taken to implement the rules and programs? E.g. Inspections conducted to check no traps/snares put up within or nearby areas.

d. Have appropriate disciplinary measures been imposed in accordance with company rules and national law, should any individual working for the company is found to have captured, harmed, collected or killed any RTE species?

Company Policy


HCV Management and Monitoring Report

PT HSJ has policy to protect RTE species from Managing Director, that PT. HSJ was not conducted of new planting in high carbon stock, high conservation value area (includes was fauna and flora protected), and peat area. Program to disseminate HCV area for workers was periodically conducted. The last refresh HCV Awareness dated on 20 May 2016 by Environment and Sustainability Officer. It was attended by around communities from Sido Mulyo Village and total of 15 employees. Inspection of HCV area was periodically conducted by HCV Foreman, the last inspection was conducted on 29 June 2016 and on December 2016. List of inspection, such as potential for fire and hunting disturbance. Information for Penalties of the UU No. 5/1990 have not been communicated directly to all employees and the local community during HCV socialization and through the HCV sign boards and warnings board. Based on document review and interview with worker, there is no found that the workers was captured, harmed, collected or killed any RTE species.

YES






COMPLIANCE (YES/NO)

5.2.4

Once the management plan is prepared, continuous monitoring documentation and report regarding the status of the RTE and HCVs are affected by the operations of the plantation and palm oil mill shall be available, and the results of monitoring are to be used to follow-up on the improvement of the management plan. Specific Guidance: For 5.2.4: The result of HCV monitoring may become considerations while reviewing HCV management plan.

a. Does the management plan contain ongoing monitoring of status of HCV and RTE species that are affected by plantation or mill operations?

b. Is the status documented and reported?

c. Are the outcomes of monitoring fed back into the management plan?


HCV Management and Monitoring Report

HCV management and monitoring at PT. HSJ was available in the Conservation Management Plan, one of its activity was half-yearly flora and fauna monitoring and reported in HCV Management and Monitoring Report, PT. HSJ. The last report was for Semester I 2016. Management was monitored the protected species accordance Government Regulation/PP. No.7/1999 for Pinang Merah (Cystostachys lakka), however did not for Meranti putih (Shorea bracteolate Dyer), meranti putih was listed in Redlist IUCN with the category EN A1cd+2cd. Follow up from the recommendation of HCV Monitoring Report 2016 has been documented and available during audit, but for HCV Monitoring Report 2015 has not been documented, it also was found in previous audit (Transfer Audit).Because of repeated NC then this time upgraded to Major NC.

YES (Major NCR

2016-13) CLOSED

5.2.5

Where HCV areas overlapped with an identified local community’s land, there shall be evidence of a negotiated agreement that optimally safeguard their HCVs and the local community’s rights Specific Guidance: For 5.2.5: If a negotiated agreement cannot be reached, there should be evidence of sustained efforts to achieve such an agreement. These could include third party arbitration (see Criteria 2.3, 6.3 and 6.4).

a. Is there HCV set-asides with existing rights of local communities?

b. Who are the affected communities?

c. Is the identified HCV areas mapped?

d. Is there evidence of stakeholder consultation and negotiated agreement, in accordance to FPIC principles, with local community to optimally safeguard both the HCVs

Memorandum of Understanding No. 01/SPKT/NLG/III/2016


HCV set-asides present with existing rights of around communities at PT. HSJ. The community Sidomulyo Village were affected. It has been conducted agreement between PT. HSJ with Sidomulyo Village available in Memorandum of Understanding No. 01/SPKT/NLG/III/2016 about Joint Management for Cemetery and Protect Area at Block of C13, dated on March 14, 2016 and valid for 5 years. HCV areas were mapped in Map of HCV Area in Palm Oil Plantation PT. Hari Sawit Jaya, Labuan Batu and North Labuan Batu Regency, North Sumatera Province.

YES






COMPLIANCE (YES/NO)

and rights of local communities?

e. If a negotiated agreement cannot be reached, is there evidence of sustained efforts to achieve an agreement? Refer to specific guidance for 5.2.5.

5.3

Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner. Guidance: The waste management and disposal plan should include measures for: a. Identifying and monitoring sources of waste and pollution. b. Improving the efficiency of resource utilisation and recycling potential wastes as nutrients or converting them into value-added products (e.g. through animal feeding programmes). c. Appropriate management and disposal of hazardous chemicals and their containers. Surplus chemical containers should be reused, recycled or disposed of in an environmentally

and socially responsible way based on best available practices (e.g. returned to the vendor or cleaned using a triple rinse method) and existing regulations. This is to prevent pollutions to the water sources and risk to human health. The disposal instructions on the manufacturer’s labels should be adhered to.

Use of open fire for waste disposal should be avoided. Regulations relate to waste management, such as: 1. Government Regulation No. 18 year 1999 regarding Management of Toxic and Hazardous Waste (B3) 2. Government Regulation No. 85 year 1999 regarding Amendment of Government Regulation No. 18 year 1999 regarding Management of B3 (the annex shows a list of B3 from

specific and non-specific sources, expired chemicals, leakage, remaining containers and waste of unspecified products). 3. Government Regulation No. 82 year 2001 regarding Management of Water Quality and Control of Water Pollution. This includes criteria for water quality, and requirements for

utilising and disposing waste water) 4. Government Regulation No. 81 year 2012 regarding Management of Domestic Waste 5. Decree of the Minister of Environment No. 51 year 1995 regarding Waste Water Standard for Industries 6. Decree of the Minister of Environment No. 28 year 2003 regarding Technical Guidance for Study for Utilising Palm Oil Mill Effluent (POME) on Oil Palm Plantation. 7. Decree of the Minister of Environment No. 29 year 2003 regarding Guidance for Permit Requirements and Administration for Utilising POME on Oil Palm Plantation 8. Decree of the Minister of Environment No. 112 year 2003 regarding Domestic Waste Water Standard 9. Decree of the Head of Bapedal No. 255/Bapedal/08/1996 regarding Procedure and Requirements for Storing and Collecting Used Oil 10. Guidance for Use of Pesticides, Directorate General of Infrastructure and Facilities, Ministry of Agriculture, 2011






COMPLIANCE (YES/NO)

5.3.1 (M) A documented identified source of all waste and pollution, shall be available.

SAI Global auditor’s note:

To verify the identification of waste, type of waste produced, and the way it is managed. Can be seen in the procedure or Work Instruction

a. Is there a registry/list of waste products produced?

b. Is there a registry/list of pollution sources?

Result of evaluation of environmental aspect and impact

Identification of waste and pollution sources from Negri Lama II Mill, Negri Lama Selatan, Negri Lama Central Estate, Negri Lama Utara Estate and Aek Kuo Estate activities was evident. The sources of pollution, type and control method of waste were documented. Wastes identified were among others: POME, used oil, used oil filter, agrochemical and chemical containers, contaminated rags and domestic wastes. The source of pollution, type and control method of waste was recorded. The waste products from estate generally were domestics waste and also several hazardous waste from estate operations activities as detailed below (but not limited): Ex-pesticides containers (bottles and jerry cans) Used battery from the heavy vehicles Plastics Medical waste (first aid usage) Polybag rags and fertilizer containers Emissions from vehicles

While at the Mill it was several hazardous waste generated from the mill operations, in detailed below (but not limited): POME Palm shell Fibre Depricaper waste Empty bunch Boiler ash Chemicals jerry can and bottles Gunny sacks from chemicals materials Sacks resulted from fertiliser materials Welding materials from workshop activities Lubricants from workshop materials Contaminated rags from workshop activities

YES






COMPLIANCE (YES/NO)

Usage lamps Tires Usage batteries Usage oil filters

Emissions from vehicles and other engines (genset, boilers)

5.3.2 (M) There shall be evidence that all chemicals and their empty containers are disposed of responsibly

SAI Global auditor’s note:

- All hazardous waste management

process can be traced from

producer to its utilization / final

discharging

- TPS satellite is not acknowledged

for its existence. If hazardous

waste will be stored in TPS

satellite, the storage process

needs a permit. Except for the

temporary storage of medical

waste which can be stored up to 1

month in the clinic before being

transported to hazardous licensed

polling stations and placed in

appropriate containers.

a. Is there an inventory of chemicals and their containers that are used and kept on site?

b. How are chemicals and their containers stored and disposed off? Is it in accordance to best practices?

Procedure AA-APM-OP-1100.11-R1 and AA-KL-04-EFP – Agrochemical Waste Handling

Balance sheet of agrochemical containers

All agrochemical containers were rinsed and then disposed to licensed vendor: PT. Shali Riau Lestari for transporter. Hazardous waste manifests were sighted for handling of agrochemical containers on 29 June 2016 and 20 December 2016. Liquid waste from agrochemical was reused for the next spraying application. The disposal methods of were described on documented Procedure AA-APM-OP-1100.11-R1. Records of chemical containers quantity disposed were evident. Liquid waste from agrochemical was reused for the next spraying application. While the ex-fertilizer sacks was also rinsed and reuse for fertiliser distribute “untilan” at estate operations.

License of hazardous wastes temporary storage (TPS B3) for Negeri Lama Dua Mill as issued from Labuhan Batu Utara Regent No. 503.660/BLH-LB/WAS/2015 dated 29 June 2016 and was valid for 5 years defined that the time limit was 180 days but if produce (less than) < 50 kg per days may store more than 180 days. And license for Aek Kuo Estate (KAK) as issued from Labuhan Batu Utara Regent No. 660/177/BLH2015 dated 3 August 2015, and were valid for 5 years. The license include: lubrication oil, battery, oil filter, rugs and medical wastes; include pesticides/chemical containers. Manifest of disposal were sighted for 29 June 2016 and 20 December 2016

YES






COMPLIANCE (YES/NO)

(as prescribed by manufacturers’ labels, local requirement, national or international best practice)

c. Are collection and disposal records of chemicals and their containers maintained?

5.3.3 A documented waste management plan to avoid or reduce pollution and its implementation shall be available

SAI Global auditor’s note

- Need to check records related to

non hazardous waste disposal,

compare with the capacity of

landfill. Auditor need to verify how

to ensure that the landfill

appropriate with quantity of waste.

- No matter how small oil spills on

land are the findings

- Auditing must verify landfill in

estate to understand domestic

waste management of organic and

inorganic.

- Landfill must be equipped with a

note /statement of open date and

due date. If time allocation is

insufficient, visiting land fill in

nearby house area is needed.

- All traces burning must be

identified as findings and must be

re-verified

a. Is there a documented waste

Procedure AA-KL-05-EFP – Industrial Waste Handling

Procedure AA-AMP-OP-1100.11-R1 and AA-KL-04-EFP – Agrochemical Waste Handling

Procedure AA-AMP-OP-1100.11-R1 and AA-KL-06-EFP – Hazardous Waste Handling

Permit of temporary storage of hazardous waste for Negeri Lama Selatan Estate #503.660/322/BLH-LB/WAS/2014

Permit of temporary storage of hazardous waste for Negeri Lama Dua Mill #660/177/BLH2015 dated 3 August 2015

Contractual agreement of PT. Hari Sawit Jaya and

Identification of waste and pollution sources from Negri Lama II Mill, Negri Lama Utara Estate and Aek Kuo Estate activities was evident. The sources of pollution, type and control method of waste were documented. Wastes identified were among others: POME, used oil, used oil filter, agrochemical and chemical containers, contaminated rags and domestic wastes. Procedure waste handling including hazardous waste handling has been established and implemented. The procedure required waste to be segregated from point of sources. In addition Mill and Estate also established waste register, which described wastes sources from each activity/location, its classification (organic, inorganic or hazardous), and its disposal, reusing or recycling. Mill and Estate including housing has provided different colour of waste bin for each type of waste. Organic and inorganic wastes from Mill and Estate including housing were disposed to landfill in the Estate area. Areas of organic and inorganic wastes disposal was far from housing, in the flood-free area and not in swamp area and completed with warning sign not burning wastes. There are evident the measurement periodical report include air ambience quality; emissions of vehicles and other engines (boilers, generators, etc.) also the programme on how to reduce the fuel usage and environmentally friendly. Hazardous waste was reported to North Sumatera Province and Labuhan Batu District Environmental Agency, Central of Environmental Management Regional Sumatera and Ministerial Office of Environment. Receipt note was also sighted.

NO (Minor NCR

2016-14) OPEN






COMPLIANCE (YES/NO)

management and disposal plan to avoid or reduce pollution?

b. Does the waste management and disposal plan, at minimum, include measures for:

Identifying and monitoring sources of waste and pollution?

Improving the efficiency of resource utilisation and recycling potential of wastes as nutrients or converting them into value-added products (e.g. through animal feeding programmes)?

Appropriate management and disposal of hazardous chemicals and their containers?

Reduction, re-use and recycle of waste?

c. Is there evidence that the plan has been implemented?

d. Is there evidence that waste has not been disposed off using open fire?

PT. Shali Riau Lestari #058/SRL-PKU/MOU/II/2016 on 9 February 2016

Contractual agreement of PT. Andalas Intiagro Lestari- Aek Kuo Estate and PT. Shali Riau Lestari #055/SRL-PKU/MOU/II/2016 on 9 February 2016

Permit of PTShali Riau Lestari as hazardous waste transporter

Hazardous waste manifest Report of hazardous

waste management 1st , 2nd, 3rd and quarter 2016

Receipt note of report of hazardous waste management submission

5.4

Efficiency of fossil fuel use and the use of renewable energy is optimised. Guidance: Renewable energy use per tonne of Crude Palm Oil (CPO) or palm product in the mill should be monitored. Direct fossil fuel use per tonne of CPO or Fresh Fruit Bunches (FFB) should be monitored. Energy efficiency should be taken into account in the construction or upgrading of all operations.

Growers and millers should assess the direct energy use of their operations, including fuel and electricity, and energy efficiency of their operations. This should include estimation of fuel use by on-site contract workers, including all transport and machinery operations.

If possible, the feasibility of collecting and using biogas should be studied.






COMPLIANCE (YES/NO)

5.4.1 A plan for improving efficiency of the use of fossil fuels and to optimise renewable energy shall be in place and monitored.

a. Is there a plan for improving efficiency of the use of fossil fuels and to optimise renewable energy?

b. Has the plan been implemented and is it monitored?

c. Does the monitoring system encompass the following :

Renewable energy use/tCPO or palm product;

Direct fossil fuel use/tCPO or tFFB;

Estimated fuel use by on-site contract workers and transport and machinery operations;

Electricity use in operations.

d. Was energy efficiency taken into account during the construction or upgrading of all operations?

e. Has studies on the feasibility of collecting and using biogas been carried out?

Fossil fuels efficiency programme

Renewable energy (Fibre and shell) optimization programme

Records of diesel fuels usage

Records of fibre and shell usage

Negri Lama II Mill and its supply bases have been develop the programme/plan on how to conduct efficiency for utilization of fossil fuel by develop the standard to manage the consumption each of vehicles and electricity generator (genset) within litre per hours both for organization owned and contractors; the monitoring conducted by monthly and reported to technical department. In order to support the target, there are several programme executed on how to efficiency of fossils fuels, such as:

- Boiler modification by operated water treatment and turbine to reduce the utilisation of electrical generator (Genset)

- Nozzle calibration and preventive maintenance for genset and vehicles - Turbine powers generate to supply electricity to composting activities in

order to reduce genset utilization

Also it was developed the plan/programme regarding optimization of renewable energy known as fibre and shell as boiler energy source at mills, the target was sets on 80% as minimum energy availability, monitoring also conducted monthly by calculate the calories resulted from fibre and shell and utilize as boiler fuels whether during the construction or upgrading of all operations. There are monitoring records sighted regarding the utilization of fossils fuels and fibre shell that presented as below:

Renewable Energy (Fibre and shell)

2014 (ton/ton)

2015 (ton/ton)

2016 (ton/ton)

Per tonnage FFB 20.1 16.2 23.0

% utilization 100 100 100

Fossil fuels 2015 2016 (YTD December)

Vehicles (litre) 239,629 236,274

Genset (litre) 300,414 298,228

Per tonnage CPO 2.32 2.40

YES






COMPLIANCE (YES/NO)

5.5

Use of fire for preparing land or replanting is avoided, except in specific situations as identified in the ASEAN guidelines or other regional best practice. Guidance: Clause 11 of the Government Regulation No. 4 year 2001 regarding Control of Environmental Damage and or Pollution associated with Forest and or Land Fire, describes that the activities causing forest and or land fire are including land clearing in forestry, plantation, agriculture, transmigration, mining, tourism which are carried out through burning. Therefore, the use of fire is prohibited in those activities, unless for unavoidable circumstances or specific purposes, such as forest fire control, pest and disease control, and habitat management of flora and fauna. Implementation of restricted burning shall be authorised by the relevant agency.

5.5.1 (M) Records of land clearing with zero burning shall be available, referring to the ASEAN Policy on Zero Burning (2003) or other recognised techniques based on the existing regulations.

a. Does the company have a zero burning policy or any statement on zero burning?

b. Does the company have SOPs for land preparation which mentions zero burning?

c. Was land prepared using the burn method? If yes, was it based on the specific situations identified in the ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions?

d. Has the policy been implemented throughout the operations?

e. Is there training programmes for associated smallholders on zero burning where appropriate?

Company policy dated 1 December 2014

Replanting procedure (AA-APM-OP-1100.20-R1)

Field observation

Company have a zero burning policy and stated in Company Policy dated 1st December 2014.

Land preparation which mentions zero burning described within the replanting procedure (AA-APM-OP-1100.20-R1), the organisation committed to zero burning by using “chipping technique” at the ganoderma risks plantation by conducting topple to the palm trees, chopping and stacking using excavator by bucket modification.

Procedure replanting mentioned that Field Assistant, Assistant Chief and Estate Manager must perform checks to ensure that the contractor does not perform burning for land preparation for replanting.

All the replanting activities requires to be documented and monitored, such as: Schedule of replanting (chipping, digging and planting), progress planting LCC (Legume Cover Crop) and Minutes Works replanting (Progress in the Works Contractor)

In the procedure of replanting mentioned that, the methods used are:

- Toppling trees using heavy equipment (excavators)

- Chipping: cutting palm trunk, so as not infected with ganoderma

- Planting LCC / legumes (Mucuna and Puereria javanica etc. So that the decay of the old oil palm trunks can be faster

- Planting of oil palm.

This method has been used in replanting the whole plantation belonging to Asian Agri group including PT. Hari Sawit Jaya – Negri Lama II Mill and its supply bases.

YES






COMPLIANCE (YES/NO)

5.5.2

Where fire has been used for eradication of pest during replanting, the records of the analysis of the use of fire and permit from the authorised agency shall be available Specific Guidance: Fire should be used only where an assessment has demonstrated that it is the most effective and least environmentally damaging option for minimizing the risk of severe pest and disease outbreaks, and exceptional levels of caution should be required for use of fire on peat. This should be subject to regulatory provisions under respective national environmental legislation. This should refer to the ASEAN Policy on Zero Burning (2003) and existing national environment regulations.

The company shall have procedure and records of emergency response to ground fire, including the means and facilities.

a. Where fire has been used for preparing land for replanting, is there evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions?

b. What was the justification for using fire?

- Not applicable Organisation has policy “zero burning” in each operational activity, including land preparation and replanting. No fire has been used for land preparation.

NA

5.6

Preamble: Growers and millers commit to report greenhouse gas emissions from their operations. However, it is recognised that these significant emissions cannot be monitored completely or measured accurately with current knowledge and methodology. It is also recognized that to reduce or minimise these emissions is not always practical or feasible. Growers and millers commit to an implementation period until the end of December 2016 for promoting best practices in reporting to the RSPO, and thereafter to public reporting. Growers and millers make this commitment with the support of all other stakeholder groups of the RSPO.

5.6

Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored. Guidance: Where practically feasible, operations should follow best management practices to measure and reduce emissions. Advice on this is available from the RSPO.

5.6.1

(M) Document(s) assessing pollution and emission sources, including gaseous, particles, soot emissions and effluent, shall be available (see Criterion 4.4) Specific Guidance: For 5.6.1: Assessment document covers identification of pollutant and emission sources, and evaluation of potential pollution level.






COMPLIANCE (YES/NO)

a. Has an assessment of all polluting activities been conducted including gaseous emissions, particulate/soot emissions and effluent (see Criterion 4.4)?

b. Is there a documented list of all identified polluting activities?

Identification of Environmental Aspect

Identification of pollution and emission sources was evident. The source of pollution, type of pollution and its control were documented, e.g. stack of boiler, electricity generator and heavy equipment, methane from WWTP and fertiliser. Monitoring of pollution and emission quality of sources identified has been programmed. Monitoring and measurement results for 1st semester 2016 were sighted for : - boiler emission against Environment Ministry Decree #07/2007, - diesel electricity generator emission against Environment Ministry Decree

#Per13/Menlh/2009, - vehicle and heavy equipment emission against Environment Ministry Decree

#05/2006, - odour emission against Environment Ministry Decree #50/Menlh/11/96, - noise against Environment Ministry Decree #48/Menlh/11/96, - also ambient air quality against Government Regulation #41/1999.

The source of pollution, type of pollution and its control was documented. The information of pollution and emission sources at Negeri Lama II Mill was reviewed including boiler emission, methane from Palm Oil Mill Effluent, diesel electricity generator and vehicles and heavy equipment.

YES

5.6.2

(M) Significant pollutants and greenhouse gas (GHG) emissions shall be identified, and plans to reduce or minimise them implemented. Specific Guidance: For 5.6.2: Plans will include objectives, targets and timelines. These should be responsive to context and any changes should be justified. Examples of reducing greenhouse gas emission are including empty bunch application, effluent land application, efficiency of fertilizer use, fuel efficiency, compost application and or methane capture. For 5.6.2 and 5.6.3: The treatment methodology for POME will be recorded.

a. Is there a documented list of all identified significant pollutants and GHG emissions?

b. Are there plans to reduce or minimise the identified pollutants

Greenhouse gas emissions reduction Programme year 2016

The program was identify the source of greenhouse gas emissions as listed below:

1. Methane from POME at mill 2. Fossil fuels emissions from vehicles and engines 3. Chemical fertilizer 4. Electricity usage

YES






COMPLIANCE (YES/NO)

and GHG emissions?

c. Do the plans include objectives, targets and timelines for reduction that are responsive to context?

d. Are the plans being implemented? Was there any changes? Is it justified?

e. Is the treatment methodology for POME recorded? (refer to C 4.4.3)

5. Land conversion 6. Peat lands emissions

There are also established the GHG reduction plan completed with objectives, targets and timelines as below:

No Program Target 2016

1 Increasing the efficiency of fossil fuel use

From 3.5 km/liter to 3.8 km/litre

2 Reducing the water usage From 1.3 m3/ton FFB to 1.25 m3/ton FFB

3 Optimizing fibre and shell as boiler fuel

90% minimum available

4 POME debit Max 2.5 m3/ton CPO

5. Grow fruit plants in each employee house

Within 10 meters for each tree

The records of each programme were sighted as evident implementation. Negeri Lama II Mill waste water was processed through a series of waste water treatment ponds: anaerobic ponds, facultative ponds and aerobic ponds. Process parameter monitoring and maintenance of the ponds were sighted. Quality of waste water effluent is monitored quarterly in line with the requirements. The results of monitoring of waste water effluent were reviewed including measurement of BOD; the result of discharge effluent conforms to the limits for parameters.

5.6.3

A monitoring plan and results of regular reporting on emission and pollutants from estate and mill operations using appropriate methods, shall be available. Specific Guidance: For 5.6.2 and 5.6.3: The treatment methodology for POME (Palm Oil Mill Effluent) will be recorded. For 5.6.3 (GHG): For the implementation period until December 31st, 2016, an RSPO-endorsed modified version of PalmGHG which only includes emissions from operations (including land use practices) can be used as a monitoring tool.

In addition, during the implementation period, growers will start to assess, monitor and report emissions arising from changes in carbon stocks within their operations, using the land use in November 2005 as the baseline. The implementation period for Indicator 5.6.3 is the same implementation period for Criterion 7.8.

During the implementation period, reporting on GHG will be to a relevant RSPO working group (composed of all membership categories) which will use the information reported to






COMPLIANCE (YES/NO)

review and fine tune the tools, emission factors and methodologies, and provide additional guidance for the process. Public reporting is desirable, but remains voluntary until the end of the implementation period. During the implementation period the RSPO working group will seek to continually improve PalmGHG, recognising the challenges associated with measuring GHG and carbon stock.

PalmGHG or RSPO-endorsed equivalent will be used to assess, monitor and report GHG emissions. Parties seeking to use an alternative to PalmGHG will have to demonstrate its equivalence to the RSPO for endorsement. Methodology for calculating GHG refers to 7.8.1.

a. Is there a system in place to monitor emission of pollutants including greenhouse gases from estate (plantation) and mill operations?

b. Is there regular reporting of the monitoring outcomes? How often and to whom is reporting done?

c. Is the monitoring and reporting conducted using appropriate tools? What tool is being used to assess, monitor and report on GHG emissions?

Please refer to specific guidance for GHG requirements.

Calculation of GHG emission, calculation Year assessment 2015.

The GHG emission calculation for Negri Lama of PT. Hari Sawit Jaya use Palm GHG V 2.1.1 as RSPO requirement. The reporting was periodically delivered to the RSPO interest. Calculation was sighted and summarized as follows:

Desc Own Crop Group Out grower

Total field emissions (tCO₂e) 898313.23 205695.70 30872.84

Total mill emissions (tCO₂e) 1494.16 0 0

PT. HSJ was reported the GHG emission calculation to RSPO on 22 December 2016, the reported was sighted during audit.

YES



PRINCIPLES 6: RESPONSIBLE CONSIDERATION OF EMPLOYEES AND INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS AND MILLERS




COMPLIANCE (YES/NO)

6.1

Aspects of plantation and mill management that have social impacts, including replanting, are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continual improvement. Guidance: Identification of social impacts may use AMDAL as part of the process, however it is the company’s responsibility to provide objective and proper evidence to the audit team that entire requirements in the social impact assessment cover all aspects of estate and mill operations, and their changes along the time.

Identification of social impacts should be carried out by the grower with the participation of affected parties, including women and migrant workers as appropriate to the context. The involvement of independent experts should be sought where this is considered necessary to ensure that all impacts (both positive and negative) are identified.

Participation in this context means that affected parties are able to express their views through their own representative institutions, or freely chosen spokespersons, during the identification of impacts, reviewing findings and plans for mitigation, and monitoring the success of implemented plans.

Potential social impacts may result from activities such as: building new roads, processing mills or other infrastructure; replanting with different crops or expansion of planting area; disposal of mill effluents; clearing of remaining natural vegetation; changes in employee numbers or employment terms; smallholder schemes. Plantation and mill management may have social impacts (positive or negative) on factors such as: a. Access and use rights; b. Economic livelihoods (e.g. paid employment) and working conditions; c. Subsistence activities; d. Cultural and religious values; e. Health and education facilities; f. Other community values, resulting from changes such as improved transport /communication or arrival of substantial migrant labour force. g. Traditional or customary rights owned by the local community, if identifiable h. Welfare of workers/labour and women, children and vulnerable group i. Contribution to the local development, including improvement of human resources, local and customary communities. Regulations relating to identification of environmental and social key issues including indigenous rights and methodology to collect data and utilize the results, adopted from related regulations, such as: 1. Government Regulation No. 27 year 2012 regarding Environment Permit 2. Regulation of the Minister of Environment No. 17 year 2012 regarding Involvement of Community and Information Transparency in AMDAL Process 3. Regulation of the Minister of Environment No. 8 year 2006 regarding Guidance for AMDAL Preparation 4. Decree of the Head of Bapedal No. No. 299 year 1996 regarding Technical Guidance for Social Aspect Study in AMDAL Preparation 5. Regulation of Minister of Home Affairs No.52 year 2014 regarding Guidance on the Recognition and Protection of the Indigenous People 6. Regulation of the State Minister of Agrarian Affairs/Head of the Land National Agency No. 5 year 1999 on Guidelines for the Settlement of Problems Related to the Communal






COMPLIANCE (YES/NO)

Reserved Land of the Customary Law Abiding Community

6.1.1 (M) A social impact assessment (SIA) including records of meetings shall be documented.

a. Has an SIA been conducted? When was the last SIA conducted?

b. Is the process in conducting the SIA and the findings documented?

c. Does the SIA cover all of the potential impact factors, including:

Access and use rights;

Economic livelihoods (e.g. paid employment) and working conditions;

Subsistence activities;

Cultural and religious values;

Health and education facilities;

Other community values, resulting from changes such as improved transport /communication or arrival of substantial migrant labour force.

Social impact assessment report, 1994

Social impact assessment result was conducted in 1994 by third parties. The studies including pre operation and operation phase of estate and mill.

Participation of affected parties and local communities stated and described in the report including questioner.

Positive impacts were identified such as: Regional development, increased population of the village economy and ease of road access.

Negative impacts were identified such as: increase of road due to FFB transport (public health), Noise and dust coming from transport (social cultural), unfair donation for community estate (social cultural).

The assessment scope are :

a) Village monography

b) Relationship between company and village

c) Livelihoods

d) Religion activities

e) Village infrastructure

f) Positive impact

g) Negative impact

h) Replanting

Positive impacts on SIA were identified, such as:

- Alternate livelihoods - Work opportunities - General infrastructure (praying facility, sport facility, etc.) - CSR program

Negative impacts on SIA was identified, such as:

YES






COMPLIANCE (YES/NO)

• Dust pollution due to a passing truck on the road • Air quality • Decrease in air quality • Disturbance on water biota • Decrease in ground water quality • Road damage and traffic accident

Social impact concerning welfare of workers/labour and women, children and vulnerable group has been identified in SIA Assessment report.

6.1.2 (M) There shall be evidence that the assessment has been conducted with the participation of affected parties.

SAI Global auditor’s note: Company’s evidence of participation of the affected parties (e.g. attendance register, minutes of meeting with stakeholders) must be directly confirmed during stakeholder consultation

a. Does the assessment involve consultation with the affected parties? Who are the affected parties?

b. Is there record of how the participatory assessment has been conducted? Were the affected parties able to express their views through their own representative institutions, or freely chosen spokespersons, during the identification of impacts, review of findings and planning for mitigation?

• Social impact assessment report, 1994

• Interview with local governance and stakeholder on 22 December 2016

Social Impact assessments involve consultation with the affected parties. Evidence of participatory action from local communities was also sighted in related SIA documentation including photos. SIA method is done by interview and questionaire. Attendance list and photograph of social impact assessment were available. Assessment has been done with the participation of affected parties such as head of villages, village representatives, and sub district police head, etc. Affected parties have been able to express their views through their own representative institutions, or freely chosen spokespersons, during the identification of impacts, reviewing findings and plans for mitigation, and monitoring the success of implemented plans..

YES

6.1.3 (M) Plans for management and monitoring of social impacts to avoid or reduce negative impacts and promote positive ones, based on social impact assessment, through consultation with the affected parties, shall be available, documented and timetabled, including responsibilities for implementation.






COMPLIANCE (YES/NO)

Specific Guidance: For 6.1.3 and 6.1.4: Plan for management and monitoring of social impacts shall be established to avoid or reduce negative impacts and promote the positive ones, and monitoring of identified impacts shall be developed in consultation with the affected parties, documented and timetabled, including responsibilities for implementation. Methodology to identify customary right and local community and social impacts assessment can be made with the following: a. Document review b. Field observation c. Interview d. FGD (Focus Group Discussion) e. Participatory mapping

These involve participation of the community to define potential social impacts and management recommendation. The process refers to Regulation of the Minister of Environment No. 17 year 2012 regarding Community involvement and Information Transparency in the Process of Environment Impact Assessment (SEIA).

a. Is there any documented record to outline the plan on mitigation, implementation and monitoring according to the SIA report?

b. Have plans for avoidance or mitigation of negative impacts and promotion of the positive ones, and monitoring of impacts been developed?

c. Have these plans been documented, with clear timetables? Is the timeline reasonable?

d. Have the persons responsible for implementation of the plans been identified?

• Monitoring and CSR Program year 2016

• CSR Report for year 2016

• Action Plan and Implementation SIA PT. Hari Sawit Jaya year 2016

PT. Hari Sawit Jaya has a management plan and monitoring of social impacts as contained in SIA report, has been developed into Environmental Monitoring and Management Program.

Social Assessment Monitoring conducted every year by CSR Region, monitoring between planning and realization were identified and evident. Negative impact was used and identified for CSR program.

E.g. road repair facilities, road watering, health checks

All the planning and realization have been documented and are also completed with photos relevant to CSR activities.

Realization of planning have been defined and implemented within a reasonable time.

YES

6.1.4

The documented plan for management and monitoring of social impacts, shall be reviewed at least on two-yearly basis. If necessary, the plan should be updated. There shall be evidence that the review process includes participation of all affected parties. Specific Guidance: For 6.1.3 and 6.1.4: Plan for management and monitoring of social impacts shall be established to avoid or reduce negative impacts and promote the positive ones, and monitoring of identified impacts shall be developed in consultation with the affected parties, documented and timetabled, including responsibilities for implementation.






COMPLIANCE (YES/NO)

Methodology to identify customary right and local community and social impacts assessment can be made with the following: a. Document review b. Field observation c. Interview d. FGD (Focus Group Discussion) e. Participatory mapping

These involve participation of the community to define potential social impacts and management recommendation. The process refers to Regulation of the Minister of Environment No. 17 year 2012 regarding Community involvement and Information Transparency in the Process of Environment Impact Assessment (SEIA).

a. Is the plan reviewed every two years?

b. Has the plan been updated as necessary (i.e. in cases where the review has concluded that changes should be made to current practices)?

c. Have the changes to the plan been implemented?

d. Is there evidence that the review has been done with the participation of the affected parties?

e. Has the process been recorded/documented?

RKL RPL PT Hari Sawit Jaya Period Semester 1 and 2 Y2015 and Semester 1 Y2016

Analisis Dampak Lingkungan – PT. Hari Sawit Jaya

Monitoring and CSR Program year 2015 and 2016

CSR Report for Y2015

CSR Report for Y2016 (ongoing)

Review of Social Management Plan (RKS) and Social Monitoring Plan (RPS) was conducted minimum one time every year by Sustainability & CSR Department and last update was on 2016. Improvement and corrective action regarding RKS and RPS would be performed as soon as possible based on the relevant and actual condition.

Management and monitoring social impact was conducted internally by the company. This can be seen on document “RKL RPL PT Hari Sawit Jaya Period Semester 1 and 2 Y2015 and Semester 1 Y2016”.

During the audit there was no changes regarding RKS and RPS, the management and monitoring plan of social impact was still relevant with the actual condition.

NO (Minor NCR

2016-15) OPEN

6.1.5 Particular attention shall be paid to the impacts of smallholder schemes (where the plantation includes such a scheme).

a. Are there schemed smallholders involved?

b. Have they been considered and involved in the whole process of the SIA?

c. What are the main impacts affecting these smallholders?

No Smallholder scheme in PT Hari Sawit Jaya

There was no Smallholder scheme in PT Hari Sawit Jaya

NA






COMPLIANCE (YES/NO)

6.2

There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties. Guidance: Decisions that the growers or mills are planning to make should be made clear, so that local communities and other interested parties understand the purpose of the communication and/or consultation.

Communication and consultation mechanisms should be designed in collaboration with local communities and other affected or interested parties. These should consider the use of appropriate existing local mechanisms and languages. Consideration should be given to the existence/formation of a multi-stakeholder forum. Communications should take into account differential access to information by women as compared to men, village leaders as compared to day labourers, new versus established community groups, and different ethnic groups.

In these communications, consideration should be given to involve third parties, such as disinterested community groups, NGOs, or government (or a combination of these), to facilitate smallholder schemes and communities, and others as appropriate.

6.2.1 (M) Communication and consultation procedures shall be documented

a. Does the company maintain a list of local communities and other affected or interested parties?

b. Is there SOP being developed by the company for communication and consultation between the company and the local communities and other affected or interested parties?

c. Is the FPIC approach incorporated in the SOP for communication and consultation with the local communities and other affected or interested parties?

d. Has the SOP been developed together with the local communities and other affected or interested parties using appropriate existing local mechanisms and in languages understood by these parties?

e. Has the SOP been socialized with

Public consultation on 22 December 2016

SOP AA-GL-50009.1-R0 - Mechanism local communication / public consultation for interested parties.

Stakeholder list of PT Hari Sawit Jaya, updated 2 February 2016

The Company has a list for the local community and other interested parties and mentioned in the List of Stakeholder updated on 2 February 2016.

SOP related to communication and consultation is described in the SOP AA-GL-50009.1-R0 - Mechanism local communication / public consultation for interested parties.

FPIC was not applicable in PT. Hari Sawit Jaya, however FPIC approach was incorporated in the SOP for communication and consultation with the local communities and other affected or interested parties

The existing communication and consultation mechanisms (SOP related to communication and consultation is described in the SOP AA-GL-50009.1-R0 - Mechanism local communication / public consultation) has been designed with consideration to the use of appropriate existing local mechanisms and languages. Consideration has been given to the existence/formation of a multi-stakeholder forum.

The Procedure has been developed and disseminated to the stakeholder. Minutes of socialization and attendance list was sighted. The existing communication and consultation was taken into account differential access to information by women as compared to men, village leaders as compared to day labourers, new versus established community groups, and different

YES






COMPLIANCE (YES/NO)

the local communities and other affected or interested parties taking into account the differential access to information by women as compared to men, village leaders as compared to day labourers, new versus established community groups, and different ethnic groups?

f. Have interviews with affected parties been carried out to verify that the SOPs are effective?

ethnic groups.

Procedure was available in Indonesian and easily to understand and it was effective. It was verified during public consultation and interview with stakeholder dated 22 December 2016.

6.2.2 The company shall have official(s) who is responsible for consultation and communications with parties.

a. Who in the company is appointed to be responsible for communication and consultation with the affected parties?

b. Has the position been made official with clear and proper job description?

c. Have the affected parties been made aware and have access to the person in charge?

- Memorandum for Appointment Letter of Glorius A. Bangun as Humas (Public Relations)

- Jobdesk for Public Relations - Interview with local

communities on 22 December 2016

SK No : 064/HR-RO1/MEMO/04/15 dated 9 April 2015 about Assigment Mr. Glorius A. Bangun as Public Relations Office of PT Hari Sawit Jaya with job descriptions such as: a. Minimize disturbance toward field operational b. Develop and maintain relationship with stakeholder c. Collaborate with internal and external department to solve issues

concerning social, land and waste. d. Monitoring of waste sample delivery and process the cost for waste

analysis e. Monitoring of legal document (estate and mill) f. Updating regulations and law

Based on interview with stakeholder, they know Mr. Glorius A. Bangun as Public Realtion in Negeri Lama Group.

YES

6.2.3 The company shall have a list of stakeholders, records of communications, including confirmation of receipt and that efforts are made to ensure understanding by affected parties, and records of actions taken in response to input from stakeholders.

a. Is the following maintained?

List of stakeholders (local communities and other affected


Organization has established and implemented a mechanism for receiving and providing information in the procedure - SOP Penanganan Permintaan Informasi Stakeholder (Handling of Information Request from

YES






COMPLIANCE (YES/NO)

or interested parties etc.);

Records of all communication, including confirmation of receipt or endorsement;

Evidence that efforts have been made to ensure understanding by affected parties;

Record of actions taken in response to input from stakeholders.

- Logbook Communication and Consultation Y2016

- Record of information request

and responses Y2016

- Stakeholder list of PT Hari Sawit Jaya, updated 2 February 2016

- List information for

stakeholder updated 5 March 2015

- Interview with stakeholder on 22 December 2016

Stakeholder) SOP AA-GL-5008.1-R1 dated 22 August 2011 which explain the mechanism of response to requests for information by referring to the list of stakeholders and stakeholder information according to the principles and criteria for sustainable palm oil. The initial response was given no later than 14 days after receipt of the request from stakeholders.

All information except confidential commercial information or information which has a negative impact on the environment and social can be provided by the organization. Request for information outside of the list of public information should be approval of top management and the provision of information comes with an official receipt.

In the procedure also described specific timeframe to respond the requests for information from stakeholder depend on its request. Organizations usually respond directly to requests for information from all interest party/stakeholder.

All information requests from stakeholder and their respond were listed and recorded by Mill and Estate on logbook “Record of information request and responses” e.g. road maintenance, donation, scholarship, invitation for memorial, etc.

Interview result with outgrower representative was concluded that the prices paid for FFB was transparent and complied with agreement. Determination of FFB’s price was conducted through the pricing mechanism of government.

In general, interview result indicated that the communication between local society and Estate was evident where some agreements were made to improve social relationship.

6.3

There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all affected parties. Guidance: See also to Criterion 1.2.

Dispute resolution mechanisms should be established through open and consensual agreements with relevant affected parties.

Complaints should be dealt with by mechanisms such as Joint Consultative Committees (JCC), with gender representation as necessary. Grievances may be internal (employees) or external.

For scheme and independent smallholders, refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010, and ‘Guidance on Scheme Smallholders’, July






COMPLIANCE (YES/NO)

2009.

Where a resolution is not found mutually, complaints can be brought to the attention of the RSPO Complaints System. This refers to United Nations Commission on Human Rights (UNCHR) document to support ‘Guiding Principles on Business and Human Right” to implement UN framework to “Protect, Respect and Remedy” 2011. If all the above stages of

conflict resolution have been carried out but the conflict cannot be resolved, then the next process is done through legal proceedings in court.

Conflict resolution process with the community is still continued although transfer of company’s ownership occurs.

6.3.1

(M) The mechanism, open to all affected parties, shall resolve disputes in an effective, timely and appropriate manner, ensuring anonymity of complainants and whistleblowers, where requested, as long as that information is supported with adequate initial evidence. Specific Guidance: For 6.3.1: The system should aim to reduce the risks of reprisal. For 6.3.2: Records can be in the form of evidence from process or end-result of the resolution

a. Is there an system in place to deal with complaints and grievances for all affected parties?

b. Who in the company is responsible to receive complaints and grievances?

c. Is the existence of the system been made known and communicated to all parties?

d. Is there evidence that the system is understood by all parties?

e. Is training provided to the workers on the procedures/systems?

f. Is the system effective to ensure that complaints or grievances are addressed or resolved in an effective, timely and appropriate manner?

g. Does the mechanism or procedure provide a way for workers to report a grievance against a supervisor to

• SOP handling of customer complaints / stakeholders SOP: AA-HR-3085.5 – R.0.

• Interview with stakeholder on 22 December 2016

• Asian Agri Sustainability Policy

Organization has defined the system to deal with complaints and grievances for all affected parties which documented in SOP handling of customer complaints / stakeholders SOP: AA-HR-3085.5 – R.0.

Person who responsible to receive complaints and grievances has assigned by organization that was Estate Manager. In the procedure also described stages follow up of complaint, problem identification and escalation of complaint to Estate Manager, General Manager, Region Head and Head Office (if necessary)

The existence of the system has been communicated and made known to all parties. It has been disseminated to all parties together.

Socialization and procedures training have been performed to all levels of employees. The system was effective to ensure that complaints or grievances are addressed or resolved in an effective, timely and appropriate manner. Evidence that the procedures have been implemented is the logbook of complaint. Records are routinely monitored monthly. Since January to November 2016 there were no complaints submitted by the public community and employees.

Mechanism and procedure was providing a way for workers to report a grievance against a supervisor to someone other than the supervisor.

The system was enable resolution of disputes in an effective and appropriate

YES






COMPLIANCE (YES/NO)

someone other than the supervisor?

h. How is a complaint or grievance investigated, addressed and resolved? Are complaints dealt with by mechanisms such as JCC?

i. Is there a non-retaliation or non-reprisal policy that protects complainants or whistle-blowers?

j. Is the privacy of parties protected?

k. Where a resolution is not found mutually, is there a process for complaints to be brought to the RSPO Complaints System?

manner by way of classifying complaints into internal and external, appointed the person who responsible for handling complaints, including level of officials who make decisions for complaint resolution.

Non-retaliation or non-reprisal policy that protects complainants or whistle-blowers was described in Company Policy Privacy of parties who submitted the compliant and aspirations were protected if necessary.

Where a resolution is not found mutually by means of deliberations between two parties, the problem can be resolved through third-party mediation / authorities, including grievance if there is no agreement it will be resolved through the RSPO Complaints System and it is described in the Asian Agri Sustainability Policy.

6.3.2

(M) There shall be records of process and outcome of dispute resolution. Specific Guidance: For 6.3.2: Records can be in the form of evidence from process or end-result of the resolution

a. Is the complaints or grievance resolution process documented?

b. Are outcomes or decisions reported to the parties?

c. Who has access to the documentation of the process and/or outcomes?

• Complaint log book


• Interview with union, workers and committee gender on 21 - 22 December 2016

Complaints or grievance resolution process documented in the logbook of Complaint. Records are routinely monitored monthly. However in 2016 there were no complaints submitted by the public community and employees.

It was also confirmed based on public consultation with surrounding village representative, labour union and gender committee.

Outcomes or decisions as response to followed up the complaint reported to affected parties as described in example above.

YES

6.4

Any negotiations concerning compensation for loss of legal, customary or user rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions. Guidance: This criterion should be considered in conjunction with Criteria 2.2 and 2.3, and the associated Guidance






COMPLIANCE (YES/NO)

6.4.1

(M) A procedure for identifying legal, customary or user rights, and a procedure for identifying people entitled to compensation, shall be available, referring to decision of the Constitution Court. Specific Guidance: For 6.4.1: Customary Right in the Local Regulation/Perda (based on Constitution Court Decision No. 35/PUU-X/2012 regarding Customary Forest) determined through participatory mapping of customary land by the customary law community who are recognized by the surrounding customary law community and refers to Regulation of the Minister of Home Affairs (Permendagri) No. 52 year 2014 regarding Guideline of Recognition and Protection of Legitimate Customary Community and Regulation of the State Minister of Agrarian Affairs/Head of National Land Agency (BPN) No. 5 year 1999 regarding Guidelines for the Settlement of Problems Related to the Communal Reserved Land of the Customary Law Abiding Community.

a. Are procedures for identifying legal, customary or user rights in place?

b. Are procedures for identifying people entitled to compensation in place?

c. Are those procedures jointly developed, agreed and accepted by local communities?

• SOP AA-GL-5003.1-R1 - Calculation and compensation method for land


Calculation and compensation method for land has been described in a procedure SOP AA-GL-5003.1-R1.

The steps of the procedures to identification and calculation of land compensation , consist of:

1. Identification of land owner

2. Measurement

3. Data input (mapping)

4. Negotiating compensation

5. Payment of compensation

6. Data documentation.

Procedure also described identifying people entitled to compensation.

Procedures was jointly developed, agreed and accepted by local communities It has been designed with consideration to the use of appropriate existing local mechanisms and languages. Consideration has been given to the existence/formation of a multi-stakeholder forum.

YES

6.4.2

A procedure for calculating and distributing fair compensation shall be established, implemented, monitored and evaluated in a participatory way. Corrective actions are taken as a result of this evaluation.

Specific Guidance:

For 6.4.2: Companies should make best efforts to ensure that equal opportunities have been provided to the heads of family, both female and male, to hold land titles in smallholder






COMPLIANCE (YES/NO)

schemes if the land ownership is individual.

The calculation procedure shall consider: a. Gender differences in the power to claim rights, ownership and access to land; b. Differences of transmigrants and long-established communities; c. c. Differences between legal ownership evidence with communal ownership of ethnical group (customary community)

a. Has a procedure for calculating and distributing fair compensation (monetary or otherwise) been established and implemented?

b. Are the procedures jointly developed, agreed, accepted and clearly understood by affected parties?

c. Is the procedure monitored and evaluated in a participatory way? Have corrective actions been taken as a result of this evaluation?

d. Does this procedure take into account the following:

Gender differences in the power to claim rights;

Ownership and access to land;

Differences of transmigrants and long-established communities;

Differences in ethnic groups’ proof of legal versus communal ownership of land.

e. Where there are schemed smallholders, is there effort to ensure equal opportunity has been provided to.

• SOP AA-GL-5003.1-R1 - Calculation and compensation method for land

Public consultation with stakeholder on 22 December 2016

Procedure for calculating and distributing fair compensation (monetary or otherwise) has been established and available in procedure of Identification and calculation of land compensation SOP AA-GL-5003.1-R1 - Calculation and compensation method for land. The steps are as described in criterion 6.4.1.

Procedures was jointly developed, agreed and accepted by local communities It has been designed with consideration to the use of appropriate existing local mechanisms and languages. Consideration has been given to the existence/formation of a multi-stakeholder forum.

The procedure monitored and evaluated in a participatory way, procedures will be revised if there is a reasonable request from stakeholders.

This procedure take into account of the gender differences in the power to claim rights, ownership and access to land, differences of transmigrants and long-established communities, differences in ethnic groups’ proof of legal versus communal ownership of land.

YES






COMPLIANCE (YES/NO)

6.4.3 (M) Compensation claims, process and outcome of any negotiated agreements shall be documented, with evidence of the participation of affected parties.

a. Is the process and outcome of negotiated agreements and compensation claims documented?

b. Does this documentation include evidence of the participation of affected parties? Is there any approval/signed by effected parties?

c. Was consent obtained from all parties to make the documents publicly available?

a. Procedure of Land dispute resolution mechanisms CR-AGR-102-GRL.06-11-1

b. Records of compensation

c. Interview with stakeholder on 22 December 2016.

It was noted that there was no ongoing progress of new land acquisition during interview with sampled villager’s representative, all previous land acquisition was solved before Land Use Title-Hak Guna Usaha (HGU). The latest HGU processing for PT. Hari Sawit Jaya has been done on February 2016 resulting Land titles (HGU) Extension No.02-12-00-00-2-00074 issued on 29 February 2016 includes SK BPN Sumatera Utara No.3/HGU/BPN.12/XI/2015 dated 8 December 2015 regarding extension land titles issues for PT Hari Sawit Jaya for area coverage 188.75 Ha. The procedures were implemented. PT. Andalas Intiagro Lestari, Aek Kuo Estate is now on process for HGU extension. All compensations process with local communities is completed. The process now is process for technical consideration in gaining Location Permit from Land Agency (BPN) of Labuhan Batu Regency.

YES

6.5

Pay and conditions for employees and for contract workers always meet at least legal or industry minimum standards and are sufficient to provide decent living wages. Guidance: Labor union agreement or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday, maternity leave, reasons for dismissal, period of notice, etc.) shall be available in the languages understood by the workers or explained carefully to them by a management official or Labor Union if any.

Regulation related to the minimum wage such as, Regulation of the Minister of Manpower & Transmigration No. 7 year 2013 regarding Minimum Wage, shall be implemented.

Definition of Decent Living Wage refers to the Act No. 13 year 2003 (Manpower Act) is a set of standard necessities that must be fulfilled by a worker in order to have a decent physical and social living for a month.

SAI Global auditor’s guidance:

There should be direct verification of below from all type of workers arrangement. For examples if the company has three types of workers arrangements: BHL, SKU and “borongan” then review of documented evidence and interview shall include all of those workers. Consider level of adequate sampling when arranging group discussion with each type of worker.

The auditor shall ensure:






COMPLIANCE (YES/NO)

- that company policy and work contract do not provide any possibility of workers aid/helper.

- review shall also cover company rules for determining worker capability for each of type work, e.g. FFB harvester (ha/day or kg/day or FFB/day); loose fruit picker (kg-Ha/day); sprayer (Ha/day); manual upkeep (Ha/day), etc.

- company policy and record of implementation need to be crosscheck with workers interview

- taken into account Ministry of Workforce decree No. 100/2004, including clause 10.3 (see indicator 6.5.2 for decent living wages)

- pay attention to type of work assign to PKWT, it can’t be main activities

- for casual (BHL) workers, auditor need to ensure that there is no work days limit in contract so that minimum wages are impossible to be gained (e.g. when daily wages calculated based on 25 work days, while contract stated maximum work days are only 19 days)

6.5.1 (M) Documentation of pay and conditions for employees based on the existing manpower regulations shall be available.

a. What types of employment arrangements are there in the company? (E.g. contractual, outsourced, apprenticeships, direct hires, piecemeal basis, etc.)

b. Is there documentation of pay and conditions for each employee?

c. Is there a definition for living wage in the country? If not, how was the decision on wage for employees and contract workers made?

- Payroll list

- Letter form Governor of North Sumatra Nomor : 188.44/89/KPTS/Tahun dated 21 March 20162016, minimum wages (UMP) for Kabupaten Labuhan Batu is Rp. 2.250.000/month

- Internal Memorandum No. 157/HR-RO1/MEMO/04/2016 dated 28 April 2016 about PHL and SKU wages.

- Joint Agreement or PKB

(Perjanjian Kerja Bersama) Period 2015 – 2017

- BKS PPS letter No.46/BKS-

In PT Hari Sawit Jaya there are 2 types of worker status, SKU and PHL. For PHL workers, their wages follow the national law (UMP) and for SKU, their wages follow BKS PPS letter No.46/BKS-PPS/2016 dated 22 February 2016 about SKU wages. Beside that, the company published Internal Memorandum No. 157/HR-RO1/MEMO/04/2016 dated 28 April 2016 about PHL and SKU wages.

PHL will get wages Rp. 90.000/work days and SKU workers will get wages Rp 2.178.625 plus monthly fixed called “Catu beras”. The proportion of “Catu beras” or Rice Ration can be seen on Joint Agreement Letter (PKB).

Wages Rp. 90.000/work days is for 6 work days in a week.

KNU and PND Payment of wages in 2016 based on the Letter form Governor of North Sumatra Nomor : 188.44/89/KPTS/Tahun 2016, minimum wages (UMP) for Labuhan Batu Regency is Rp. 2.250.000 per month. KAK Payment of wages in 2016 based on the Letter form Governor of North Sumatra Nomor : 188.44/201/KPTS/Tahun 2016 tanggal 21 March 2016, minimum wages (UMP) for Labuhan Batu Utara Regency is Rp. 2.250.000

YES






COMPLIANCE (YES/NO)

PPS/2016 dated 22 February 2016 about SKU wages

per month.

“Catu beras” or Rice Ration details are :

a. Workers alone : 15 kg b. One legal wife: 9 kg c. Children (until 3): 7,5 kg

If worker have one wife and 2 kids then he will receive 15 kg + 9 kg + 15 kg (for 2 kids), total 39 kg of rice every month.

Recordings are available in the employee's salary slip salary payment.

6.5.2

(M) Collective Labor Agreement/Company Regulation, in accordance with the manpower regulations, shall be available in understandable language; and explained by the management or Labor Union to the workers. Specific Guidance: For 6.5.2: Collective Labor Agreement (Perjanjian Kerja Bersama/PKB) and or Company Regulation are developed by the company together with the Labor Union, if any, in the company referring to the manpower regulations, such as the Regulation of the Minister of Manpower No. 6 year 2011 regarding Procedure for Establishing and Endorsing the Company Regulation, and Developing and Registering Collective Labor Agreement.

a. Is the pay and conditions of employment clearly detailed in the employment or service contracts? (E.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc.)

b. Is the contract prepared in languages understood by the workers, explained carefully to workers by management officials, and signed by both the authorised signatory of the company and employee?

c. Does the pay and conditions

- Joint Agreement or PKB (Perjanjian Kerja Bersama) Period 2015 - 2017

- Contract for PHL workers in KNU, KAK and PND

- List of employees of PT Hari Sawit Jaya updated November 2016

- Interview with workers union and workers on 20 – 21 December 2016

Agreement / contract of employment for workers, has been included in the PKB (Joint Agreement) has been endorsed by Indonesian Ministry of Manpower. In the agreement regulates the : working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc.).

Contract for BHL employees was reviewed, such as : a. PHL contract on behalf of Alum Panjaitan, Helpinra Manurung,

Rosdiana, Melfariati and Nasip Barus, KNU, dated 1 October 2016, period of contract unknown

b. PHL contract on behalf of Nova Harahap, Nurlela Br Manurung, Asnita Lase, Santika and Sudirman Harahap, KAK, wages Rp. 90.000/work days, dated 1 July 2016 until 31 December 2016, participation in BPJS Ketenagakerjaan not stated in contract

c. PHL contract on behalf of Ngatiman, Hariman P. Bintang and Harianto, PND, wages Rp. 90.000/work days, dated 17 December 2016, period of contract unknown and participation in BPJS Ketenagakerjaan

YES (Major NCR

2016-16) CLOSED






COMPLIANCE (YES/NO)

provided in labour laws, union agreements or direct contracts of employment comply with:

The decent living wage as provided in the National Interpretation for the country; or

The local legal requirements in meeting the minimum wage; or

The industry minimum standard for a similar position or work responsibilities

d. Is the pay received by the employee consistent with the terms of the contract and the law (relates to P2)?

e. Have there been any cases recorded of breach by the company, or complaint made by employees against the company on unjust pay and conditions?

not stated in contract d. Clauses 6 in contract of SKU and PHL worker stated that If employee

doesn’t want to transferred, then employee considered resigning. This consider as discrimination.

Based on interview with several PHL workers, they said that they not aware or not remember they have sign work contract before. Employee payment slip was sight and reviewed for Period September – November 2016 such as : a. KNU, on behalf of Alum Panjaitan, Helpinra Manurung, Rosdiana,

Melfariati and Nasip Barus b. KAK, on behalf of Nova Harahap, Nurlela Br Manurung, Asnita Lase,

Santika and Sudirman Harahap c. PND, on behalf of Ngatiman, Hariman P. Bintang and Harianto

6.5.3

Growers and millers shall provide adequate housing, water supplies, medical, educational and welfare amenities to national standards or above, where no such public facilities are available or accessible. Specific Guidance: For 6.5.3: Incentives to the employees refer to Act No. 13 year 2003 regarding Manpower.

a. Have growers and millers provided

adequate housing and other basic necessities such as that listed below to national standards or above, where no such public facilities are available or accessible?

adequate housing;

- List of public facilities of KAK, KNU and PND

- Site visit and field observation in emplacement

Public facilities were provided by the organisation and covered residential facilities, day care, kindergarten, building for prayers, sports facility (e.g. volley ball, badminton, futsal, and tennis), etc. Housing for workers and medical facilities (clinics) were was provided by the organisation with basic facilities.

Company has provided housing complex for the workers, Its permanent

NO (Minor NCR

2016-17) OPEN






COMPLIANCE (YES/NO)

adequate electricity;

clean water supplies (availability of clear water all year round);

medical services (distance to health care facility i.e. clinic, hospital);

children education (distance to school and schooling attendance (%) of children under 12)

welfare amenities.

house with two doors in one roof and permanent house. Clean water of MCK was available in housing complex, the resource is from the well or ground water. Water has been analysed by third parties.

Housings were provided for staff, non-staff even PHL (daily free workers). Each house has 2 bedrooms, a living room and one bath room. No charges given to the employee for electricity and water supply use.

List of facilities are housing (285 unit), clinic (1 unit), religion facilities (4 unit), childcare (2 unit), etc.

a. KNU : housing 148 unit, mosque/church 2 unit, clinic 1 unit and child

care 1 unit

b. KAK : housing 232 unit, mosque/church 2 unit, child care 1 unit and

clinic 1 unit

6.5.4

There shall be demonstrable efforts to improve workers’ access to adequate, sufficient and affordable food Specific Guidance: For 6.5.4: This applies if public facility is unavailable or inaccessible to provide adequate, sufficient and affordable food. The examples of the efforts are provision of transportation, employee cooperative shop, weekly market, etc.

a. Have growers and millers made demonstrable efforts to monitor and improve workers’ access to adequate, sufficient and affordable food?

Interview with workers on 21 - 22 December 2016

Monitoring of workers access to food was conducted monthly. Organisation provided Rice for workers and the family. Markets in Posko Pekan Kamis Desa Sidodadi with the range of 500 m, every payday traders will be closer to the location of the estate to trade the basic needs of. Access to the market is always taken care of by graders regularly, so that during the rainy season can still be passable. In Emplacement/employee housing there are also some stalls and small shops seller staple necessities. Employees are not difficult to obtain basic commodities every day. Employee housing access to the main road is less than 1 km with road conditions were pretty good, the market which provide food and basic goods needs easily found not far from the location of the company

YES






COMPLIANCE (YES/NO)

6.6

The employer respects the rights of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel. Guidance: The right of workers, including migrant and transmigrant workers (Angkatan Kerja Antar Daerah/AKAD) and contract workers, to form associations and bargain collectively with their employer should be respected, in accordance with The Act No. 21 year 2000 regarding Labor Union.

Labour laws and collective labor agreements, or in their absence direct contracts of employment detailing payments and other conditions, should be available in the languages understood by the workers or explained comprehensively to them by a management official.

Definition of Employer refers to the Act No. 13 year 2003 regarding Manpower.

6.6.1 (M) A record of the company’s policy in understandable language recognising freedom of association, shall be available

a. Has the company published a statement in local languages recognising the rights of employees to freedom of association?

b. Are the employees, including migrant and transmigrant workers and contract workers, allowed to form associations and bargain collectively with their employer?

c. Was the outcome, if any, from the collective bargaining process between the company and the association respected, implemented and adopted in full or partially by the company?

d. Are there Labour laws and union agreements, or in their absence direct contracts of employment detailing payments and other conditions, made available in the languages understood by the

- Attendance list worker for socialization of Company Policy.

- Company Policy – dated 1 December 2014.

- Collective Labour Agreement / PKB – PT Hari Sawit Jaya period 2015 - 2017

Freedom of association has been mentioned in Company Policy dated 1 December 2014. Organizations understand that workers have the right to argued, associate and organize in a labour union.

Organization committed to provides opportunities for workers to organize in unions and express an opinion.

Commitment covered in the policy are:

“ Respect the right of every employee to form or join trade unions in accordance they want and to bargain collectively”

Based on interview with labour union leader, the company has accommodated employee rights to argued, associate and organize in a labour union. Until now there has been no bargaining between companies and unions. Normative rights of employees was already filled with the company

Employees, including migrant and transmigrant workers and contract workers were allowed to form associations and bargain collectively with their employer.

There were union workers represent estate and mill employee incorporated in the SPSI /Union Labour - Perkebunan PT. Hari Sawit Jaya and registered as

YES






COMPLIANCE (YES/NO)

workers or explained carefully to them by a management official?

“PUK Serikat Pekerja Pertanian dan Perkebunan Serikat Pekerja Seluruh Indonesia PT. Hari Sawit Jaya which was founded in 5 November 2003 (registration no. 284/PUK.SPPP-SPSI/DFT/07/XI/2003).

Labour laws, union agreements which described in working agreement/PKB and direct contracts of employment detailing payments and other conditions was made available in the languages which understood by the workers and explained carefully to them by management official.

6.6.2 Records of meetings with labor unions or workers representatives shall be available.

a. Are there documented minutes of meetings between the company and main trade unions or workers representatives?

b. Are the minutes made readily available to employees upon request?

Minutes meeting of SPSI (worker union)

Based on the information the chairman of the union, the union meeting conducted in accordance with the requirements of temporary and existing issues, the recording of this meeting with the unions, among others: the attendance list and note taker. Several meetings were conducted with the unions, among others:

- Bipartit Meeting on 25 November 2016 about finger print system, decrease in harvest basis and workers welfares

YES

6.7

Children are not employed or exploited. Guidance: Growers and millers clearly define the minimum working age and working hours, based on existing regulations, such as: 1. Act No. 13 year 2003 regarding Manpower. 2. Act No. 20 year 1999 regarding Ratification of International Labour Organization (ILO) Convention No. 138 year 1973 on Allowable Minimum Age for Work. 3. Regulation of the Minister of Manpower and Transmigration No. 235 year 2003 regarding Types of Work Endangering Child Health, Safety or Morale

It is advisable to do socialisation to all level of operations regarding prohibition on employing children.

6.7.1 (M) There shall be documented evidence that minimum age requirements are met.

a. Is the minimum working age for workers together with working hours clearly defined in the company’s recruitment policy?

- Collective Labour Agreement / PKB period 2015 – 2017.

- Procedure AA-HR-305-2-00 –

The company has a policy for minimum working age. It was stated that company committed to not employ underage workers required by national legislation.

Besides that, company has a procedure AA-HR-305-2-00 – Recruitment and

YES






COMPLIANCE (YES/NO)

b. Are workers employed above the minimum school leaving age of the country or who are at least 15 years of age?

c. Is there evidence that the nature of work for workers under 18 is in accordance with International Labour Organisation (ILO) Convention 138?

d. Does ground verification show evidence of employment of workers below the minimum working age?

Recruitment and Selection.

- List of worker for KAK, KNU and PND updated November 2016

Selection which stated that every candidate must have identity card “(KTP), Kartu Keluarga, Surat Nikah (if married)”.

Based on document review as listed in “Daftar Tenaga Kerja” there are no underage workers in List of workers did not show any worker under 18 years old when they joined the company.

List of workers did not show any worker under 18 years old when they joined the company. Some copies of worker’s ID were also filled as evidence. No underage worker was met during the audit. Workers interviewed indicated no worker under 18 years old.

6.8

Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited. Guidance: Examples of compliance can be appropriate documentation (e.g. job advertisements, job descriptions, appraisals, etc.), and/or information obtained via interviews with relevant stakeholders such as affected groups which may include women, local communities, foreign workers, and migrant workers, etc.

Notwithstanding national legislation and regulation, medical conditions should not be used in a discriminatory way.

The grievance procedures detailed in Criterion 6.3 apply. Positive discrimination to provide employment and benefits to specific communities is acceptable as part of negotiated agreements.

SAI Global auditor’s guidance:

There should be direct verification of below from all type of workers arrangement. For examples if the company has three types of workers arrangements: BHL, SKU and “borongan” then review of documented evidence and interview shall include all of those workers. Consider level of adequate sampling when arranging group discussion with each type of worker.

The auditor shall ensure:

- Review recruitment policy, check for discrimination statement, e.g. workers have to resign when refuse to be transferred to other location. - Review work contract including health insurance (BPJS Kesehatan) for women workers who’s husband are not working. - Evidence of health insurance payment of the point 2 above.

6.8.1 (M) A company’s policy on equal opportunity and treatment for work shall be available and documented.






COMPLIANCE (YES/NO)

a. Is there a company policy on non-discrimination and equal opportunities? Does it at least cover the items mentioned in the criteria (6.8)?

b. Is the policy made publicly available for the relevant stakeholders?

c. Is there evidence that the policy has been implemented?

Sustainable palm oil company policy Asian Agri Group in Article 13 approved 01 December 2014

Policy made available in the strategic area in the estate and plantation

PHL and SKU workers contract

Policies on equal opportunities and treatment to get the job described in the Sustainable palm oil policy Asian Agri Group in Article 13 states that the company provides equal opportunity for all employees to organize, association and develop a career according to capabilities. In caluse 5 in workers contract (SKU and PHL) stated that first parties (company) have the right to transfer the worker inside group company, promotion or demotion to second parties (worker) amd second parties with this stated that they obey and agree to accept the company requirement as mention above. And then in clauses 6 stated that If employee doesn’t want to transfer as mention in point 5 then employee considered resigning. This statement considered as discrimination.

YES (Major NCR

2016-18) CLOSED

6.8.2 (M) Evidence shall be provided that employees and groups including local communities, women, and migrant workers have not been discriminated.

a. Is there evidence that employees and groups including local communities, women, and migrant workers have not been discriminated against?

b. Are the employees and groups including local communities, women, and migrant workers happy with the way the company is treating them?

c. Are there complaints against the company on issues relating to discrimination?

d. What is the nature of complaints employees and groups including local communities, women, and migrant workers have lodged against the company, if any?

- Procedure: AA-HR-305-2-00 – Recruitment and Selection.

- Collective Labour Agreement / PKB period 2015 – 2017.

- Pay Roll List for Worker – October 2016

- Interview with union and workers on 15 – 16 December 2016

- List of worker for KAK, KNU and PND updated November 2016

Recruitment process was documented in Procedure: AA-HR-305-2-00 – Recruitment and Selection.

Process covers :

- The collection of application file

- Selection of administration

- Announcement of the selection schedule

- Test questions and physical tests

- Summary of the results of the selection

- Announcement of selection results

- Provision of a cover letter MCU to candidates who pass the selection

- Implementation of MCU

Through interviews with workers in mill and plantation, it confirmed that there was no discrimination on working opportunities, all workers treated equally

YES






COMPLIANCE (YES/NO)

List of workers and payment list shows that the payment of wages of workers also seen that there is no discrimination related to wages earned and includes working hours.

From the interviews with workers, they feel that the basic rights of workers already filled by company.

From the interview with Union, there is no complaint related to discrimination.

6.8.3

Records of evidence that equal opportunity and treatment for work shall be available Specific Guidance: For 6.8.3: Recruitment and promotion are based on skills, capabilities, qualities and health conditions

a. Does the company keep and maintain a record of their employees’ work credentials and medical history?

b. Does the company explicitly state the indiscriminatory policy during the recruitment selection, hiring and promotion process?

c. Is the company’s indiscriminatory policy reviewed regularly?

d. Are the company’s employees recruited and promoted based on skills, capabilities, qualities, and medical fitness necessary for the job? How is this evidenced?

- Procedure AA-HR-305-2-00 – Recruitment and Selection

- Medical Records for workers

- Recrutiment records

- Promotion letter and records

Recruitment process was documented in procedure AA-HR-305-2-00 – Recruitment and Selection. Based on that procedure, it was described that the selection, recruitment and promotion of workers based on worker competency.

Employees credential and medical history were documented and recorded; medical history employees are available and kept by the nurse at the clinic.

All company policy reviewed every year by Sustainability Department..

Employee’s evaluation was conducted every year to decide promotion of employees. Based on their competency some of worker from estate was promoted to Admin.

The process of recruitment, selection and promotion is conducted transparently, and this is communicated to of candidates.

In discriminatory policy is reviewed once a year during according that stated in the Company Policy

Recruitment process and promotion is done in accordance competency and medical fitness result. And this is evident from ratings performance review that conducted every year. Record of promotion was reviewed.

And it looks that personnel accordance with his/her competency (e. g, Estate Asst, Public Relations, Nurse, foreman, etc.).

Workers appraisal for Y2015 was reviewed.

YES






COMPLIANCE (YES/NO)

6.9

There is no harassment or abuse in the work place, and reproductive rights are protected. Guidance: There should be a clear policy developed in consultation with employees, contract workers and other relevant stakeholders, and the policy should be publicly available. Progress in implementing the policy should be regularly monitored, and the results of monitoring activities should be recorded. Notwithstanding national legislation and regulation, reproductive rights are respected.

6.9.1

(M) A policy to prevent sexual and all other forms of harassment and violence, shall be documented, implemented and communicated to all levels of the workforce. Specific Guidance: For 6.9.1 and 6.9.2: These policies should include education for women and awareness of the workforce.

There should be programmes provided for particular issues faced by women and men, such as violence and sexual harassment in the workplace.

A gender committee specifically to address areas of concern to women will be used to comply with this Criterion. This committee, which should include representatives from all areas of work, will consider matters such as: training on women’s rights; counselling for women affected by violence; child care facilities to be provided by the growers and millers; women to be allowed to breastfeed up to nine months before resuming chemical spraying or usage tasks; and women to be given specific break times to enable effective breastfeeding.

a. Does the company have the policy to prohibit any form of sexual and all other forms of harassment and violence?

b. Has this policy been documented, implemented and communicated clearly to all levels of the workforce?

c. Is there a clear protocol for the company to deal/handle such issues/complaints received from the workforce?

d. Is there a list of awareness programs or training provided to the workforce in relation to these issues?

e. Has the company formed a Gender Committee to address areas of concern to women? Is there a list of

- Company Policy dated 1 December 2014.

- Attendance list worker

- Organization structure Gender Committee

- Interview with gender committee on 20 – 22 December 2016

The company has prohibited sexual harassment and violence as committed and written in company policy dated 1 December 2014.

This policy has been documented, implemented and communicated to all level workers. Communication was conducted by Afdeling Assistant to his team.

In case there is any harassment and violence, it will be reported to Gender Committee to be followed up. Documented procedure has been established to describe handling mechanism of sexual harassment case - SOP AA-HR-309.01-R0.

Awareness/training program was listed and discussed during Gender Committee meeting.

Gender Committee has been made regular program for all employees, women and the training required.

Company has formed A Gender Committee since April 2013 and consist :

YES






COMPLIANCE (YES/NO)

the members sitting in the committee? What are the Terms of Reference of the committee? Does it include the handling of issues such as:

training on women’s rights;

counselling for women affected by violence;

child care facilities to be provided by the growers and millers;

women to be allowed to breastfeed up to nine months before resuming chemical spraying or usage tasks; and

women to be given specific break times to enable effective breastfeeding.

f. Is the policy regularly reviewed?

The members are :

- Head of Committee

- Vice of head committee

- Secretary

- Vice of secretary

- Members

Gender Committee activities such as handle complaint from female workers, reporting and data collecting if case appeared concerning sexual harassment.

Based on interview with Gender Committee, their activities include training on women’s rights, counselling for women affected by violence, child care facilities and breastfeeding policy.

No cases concerning sexual harassment happened in PT Hari Sawit Jaya.

6.9.2

(M) A policy to protect the reproductive rights, shall be documented, implemented and communicated to all levels of the workforce Specific Guidance: For 6.9.1 and 6.9.2: These policies should include education for women and awareness of the workforce.

There should be programmes provided for particular issues faced by women and men, such as violence and sexual harassment in the workplace.

A gender committee specifically to address areas of concern to women will be used to comply with this Criterion. This committee, which should include representatives from all areas of work, will consider matters such as: training on women’s rights; counselling for women affected by violence; child care facilities to be provided by the growers and millers; women to be allowed to breastfeed up to nine months before resuming chemical spraying or usage tasks; and women to be given specific break times to enable effective breastfeeding.

For 6.9.2: see Indicator 4.6.12






COMPLIANCE (YES/NO)

a. Is there a policy to protect the reproductive rights of all, especially of women?

b. Has this policy been documented, implemented and communicated clearly to all levels of the workforce?

c. How is this policy communicated to all levels of the workforce?

- Company Policy dated 1 December 2014


A company policy on reproductive riights was documented in Company Policy item 15 dated 1 December 2014. Policy communicated to all level employees in the company on 10 December 2016. This policy has been socialized to employees based on evidences such as attendance list and Minutes of Meeting on 10 December 2016. All company policy reviewed every year by Sustainability Department, Asian Agri.

-

YES

6.9.3 A specific grievance mechanism which respects anonymity of complainants where requested, and as long as they are supported with adequate information, shall be documented, implemented, and communicated to all workforce.

a. Does the company have a mechanism to handle employment grievances, that respects anonymity and protects complainants where requested?

b. Does the mechanism provide a way for workers to report a grievance against a supervisor to someone other than that supervisor?

c. Is the mechanism documented, implemented and communicated clearly to all levels of the workforce?

d. Has the company identified personnel who will be responsible to receive and manage complaints received from the workforce?

e. Has the company received any reports or complaints of harassment

- Company Policy dated 1 December 2014


Company mechanism about complaint (internal and external) documented in procedure SOP: AA-HR-3085.5 - R.0 "Complaints of employees - the delivery and settlement of employee complaints'.

In the procedure also described the process of complaint. Complaint process cannot report only to Supervisor but other such Union, Gender Committee. Stages of complaint were described in the procedure.

In point in the procedure stated that the company will respects anonymity and protects complainants where requested.

All company policy reviewed every year by Sustainability Department, Asian Agri.

According log book and interview with related workers in the company, there is no complaint that received by company.

YES






COMPLIANCE (YES/NO)

or abuse? How was it addressed or resolved?

f. Is the policy reviewed regularly?

6.10

Growers and millers deal fairly and transparently with smallholders and other local businesses. Guidance: Transactions with smallholders should consider issues such as the role of middle men, transport and storage of FFB, quality and grading. The need to recycle the nutrients in FFB (see Criterion 4.2) should also be considered; where it is not practicable to recycle wastes to smallholders, compensation for the value of the nutrients exported may be considered through the FFB price.

Smallholders should have access to the grievance procedure under Criterion 6.3 if they consider that they are not receiving a fair price for FFB, whether or not middle men are involved.

The need for a fair and transparent pricing mechanism is particularly important for outgrowers who are contractually obliged to sell all FFB to a particular mill.

If mills require smallholders to change practices to meet the RSPO Principles and Criteria, consideration should be given to the costs of such changes, and the possibility of advance payments for FFB can be considered.

6.10.1

Current and past prices paid for Fresh Fruit Bunches (FFB) shall be publicly available. Specific Guidance: For 6.10.1: FFB pricing in Indonesia refers to the Regulation of the Minister of Agriculture No. 14/Permentan/OT.140/2/2013

a. How is the price of FFB determined?

b. Is current and past prices paid for Fresh Fruit Bunches (FFB) publicly available? How?

c. Was there any complaints on FFB pricing?

d. How was the complaint handled?

e. What was the solution?

FFB pricing mechanism

FFB Price mill display

Documented procedure (AA-GL-510.1-R0) regarding on how to handling the complaints

Site observation and interviews with FFB supplier

The FFB pricing mechanism were established that based on CPO and PK prices minus the transport cost and multiple with OER divide with taxes (PPN 10%) as illustrated as below: CPO and PK prices - transport (X) OER / 10% taxes. The FFB price still affected from market price, mill competitors and condition of the FFB. The price of FFB was published / displayed on the front yard of the mill. There is available the documented procedure (AA-GL-510.1-R0) regarding on how to handling the complaints may come from suppliers, the public relations (HUMAS) and/or administration had (KTU) will faced the suppliers regarding FFB pricing issues. So far there is no complaint from the suppliers regarding the FFB pricing.

YES






COMPLIANCE (YES/NO)

6.10.2 (M) Pricing mechanisms for Fresh Fruit Bunches (FFB) and inputs/services shall be explained and documented (where these are under the control of the mill or plantation).

a. What is the mode of recording/documenting transactions between millers with middlemen and/or smallholders?

b. Is there evidence that growers/millers have explained FFB pricing and pricing mechanisms for FFB?

c. Are there any inputs/services rendered by the millers to smallholders/middle men? Are these inputs/services having any influence to the pricing and pricing mechanisms for FFB?

d. Have inputs/services been documented (where these are under the control of the mill or plantation)?

e. Where it is not practicable to smallholders to recycle waste (i.e. EFB), is there compensation for the value of the nutrients of EFB given to the smallholders? Is this translated into the pricing factors of FFB?

FFB pricing mechanism

FFB Price mill display

Site observation and interviews with FFB supplier

So far there is no smallholders supplied for the mill, nevertheless there are available the third party FFB suppliers. The FFB suppliers were separated into contract base and non-contract base suppliers. The FFB price still affected from market price, mill competitors and condition of the FFB. The price of FFB was published / displayed on the front yard of the mill. The FFB pricing mechanism were established that based on CPO and PK prices minus the transport cost and multiple with OER divide with taxes (PPN 10%) as illustrated as below: CPO and PK prices - transport (X) OER / 10% taxes. Since there is no available smallholders (plasma); so there is no applicable for the inputs/services rendered by the millers to smallholders/middle men and recycle waste.

YES

6.10.3

Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent.

Specific Guidance: For 6.10.3 : Referring to Regulation of the Minister of Agriculture No. 14/Permentan/OT.140/2/2013, requirements to be considered in the contract are such as: 1. K Index, which is open and transparent to the smallholders or their institutions 2. Distributing the information about the decision of the Pricing Team to the smallholders institutions 3. Method of fruit sortation






COMPLIANCE (YES/NO)

4. 4. Involvement of smallholders institutions on the evaluation of weigh instrument by authorised local agency.

a. Is there a contractual agreement between the miller and smallholders/ middle men?

b. Do all parties understand the contractual agreements they have entered into?

c. Are all contractual agreements fair, legal and transparent?

d. Who keeps the contractual agreements?

Agreement of FFB processing between PT. Hari Sawit Jaya and Koperasi Petani Kelapa Sawit Wahyu Agung, dated 6 August 2015, valid for 10 years.

Agreement of FFB processing between PT. Hari Sawit Jaya and Sitolong Nadangol, dated 2 September 2015, valid for 10 years.

Interviews with FFB supplier

Contractual agreement between the miller and FFB supplier was available. Based on sign in contract and interview with FFB supplier, it was verified that all parties understood the contractual agreements they have entered into. It was evident that contractual agreements are fair, legal and transparent. Both parties keep the contractual agreement.

YES

6.10.4 Agreed payments shall be made in a timely manner.

a. How are all payments made to the smallholders/middle men?

b. What is the mode of recording/documenting transactions between millers with middlemen and/or smallholders?

c. Have agreed payments been made in a timely manner?

Records for cash transfer bank Mandiri dated 2 December 2016 for all FFB suppliers, such as Sumiyatik, Mukhtar Pinem, KPKS Wahyu Agung, Edy Ahmad, Esteria Manurung, Sitolong Nadangol etc.

For the FFB suppliers there is provide with cash transfer evident. Records sighted for cash transfer bank Mandiri dated 2 December for all FFB suppliers, such as Sumiyatik, Mukhtar Pinem, KPKS Wahyu Agung, Edy Ahmad, Esteria Manurung, Sitolong Nadangol etc. The company keep the payment voucher for the documentation. It was verified that payment has been made in a timely manner.

YES

6.11

Growers and millers contribute to local sustainable development where appropriate. Guidance: Contributions to local development should be based on the results of consultation with local communities and social impact assessment. See also Criterion 6.2 for consultation process. Such consultation should be based on the principles of transparency, openness and participation, and should encourage communities to identify their own priorities and






COMPLIANCE (YES/NO)

needs, including the different needs of men and women.

Where candidates for employment are of equal merit, preference should always be given to members of local communities. Positive discrimination should not be recognised as conflicting with Criterion 6.8.

Private plantations refer to the Act No. 40 year 2007 regarding Limited Company (PT), clause 74 (1&2) and their explanations; Government Regulation No. 47 year 2012 regarding Environment and Social Responsibilities, clause 5 (1) and explanation whereas social and environment responsibilities shall be executed. State plantations refer to Act No. 19 year 2003 regarding State Owned Company (BUMN) clause 9 (1).

6.11.1 Records of Contributions to local development based on the results of consultation with local communities shall be available.

a. Have the local development needs and priorities been identified in consultation with local communities? (refer also to C 6.2)

b. What are the contributions made to local development? Are they in accordance with the results of consultation?

c. Are there efforts to improve or maximise employment opportunities at the company for local communities?

- CSR program Y2016 - Realization and

documentation of CSR program Y2016

- Worker List

The Company has a CSR program, coordinated by the CSR Team Office Region. Team is responsible for identifying the needs of rural communities around the garden. Program identification is done by visiting and meeting with local village head. Identification of CSR results made in the proposal and approved by the head office, every year his company budgeted for CSR programs. Once proposal is approved, the CSR program was planned and implemented. Several CSR programs were conducted among others: improvement of places of worship, donations of books for elementary schools, etc. Based on interviews with stakeholders, it is known that the presence of the company has a positive impact on people's lives, especially in terms of livelihood.

Another local business was supported for growers and mills, main supports were pertinent to procurement spare parts and vehicle maintenance. The local business is assigned and controlled by central purchasing in Head Office.

To improve the manpower recruitment for local communities, company through Public Relations Officer conduct communication to head of village.

Realization of CSR program in 2016 until August in amount of Rp. 266.166.283 for activities such as education, health, economy, maintenance

YES






COMPLIANCE (YES/NO)

of infrastructure, religion activities, social, recreation and sports activities.

6.11.2 Where there are scheme smallholders, there shall be evidence that efforts and/or resources have been allocated to improve scheme smallholder productivity.

a. Is there a complete registry of independent smallholders in the supply base?

b. Have efforts been made to improve the farming practices of independent smallholders?

c. Where there are schemed smallholders, have efforts and/or resources been allocated to improve smallholder productivity?

There are no scheme smallholder associated with PT. Hari Sawit Jaya NA

6.121

No forms of forced or trafficked labour are used. Guidance Migrant workers should be legalised, and a separate employment agreement should be drawn up to meet immigration requirements for foreign workers and international standards. Any regulated deductions made should not jeopardise a decent living wage.

Passports should only be voluntarily surrendered.

There should be evidence of due diligence in applying these indicator and guidance to all sub-contract workers and suppliers.

Definition of types of worker refers to Acts No.13 year 2003 regarding Manpower.

6.12.1

(M) There shall be evidence that no forms of forced or trafficked labour are used. Specific Guidance: For 6.12.1: Workers should enter into employment voluntarily and freely, without the threat of a penalty, and should have the freedom to terminate employment without penalty given reasonable notice or as per agreement.






COMPLIANCE (YES/NO)

a. What is the company’s policy on forced or trafficked labour?

b. How does the company define forced or trafficked labour?

c. What is the process of recruiting foreign/ migrant workers directly and/or through licenced outsourcing agencies/ labour suppliers?

d. Who is the person responsible for selecting/ screening labour suppliers/ outsourcing agents?

e. Do the foreign workers have to pay a fee to the employment recruitment agency or labour suppliers in the workers’ countries of origin? If yes, does it jeopardise decent living wage?

f. Are there restrictions on workers from leaving the mill or estate or their housing facilities outside working hours?

g. What is the process if a worker wants to terminate their employment before their contract expires? In this case, who pays for the return transportation?

h. What are the penalties imposed if the workers were terminated or fired before their contract expires?

i. Who keeps the workers passports or identity documents?

j. If workers do not keep their

Company policy

Procedure : AA-HR-305-2-00 – Recruitment and Selection

List of workers updated November 2016

Interview with union and workers on 20 – 22 December 2016

Company’s policy on forced or trafficked labour was described in Company Policy Asian Agri.

Based on public consultation on 20 – 22 December 2016 with several worker and worker union it was evident that no forms of forced or trafficked labour have been used. Workers/employee entered into organization voluntarily and freely, without the threat of a penalty and they have the freedom to terminate employment without penalty given reasonable notice or as per agreement.

There were no migrant workers in estate and Mill. Its verified during audit documentation list of employee, interview with employee and stakeholders.

Person who responsible for selecting/screening labour suppliers was KTU (Kepala Tata Usaha) under supervision form Estate Managers.

Employees work based on contract labour agreement which contains agreements include: working time, dependents, payroll and consent of both parties. Working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc described in PKB years 2015 - 2017 which have been agreed between the employees (represented by SPSI) and company.

YES






COMPLIANCE (YES/NO)

passports or identity documents, is this legally allowed?

k. What is the process for workers’ to hand over their passports or identity documents to the company?

l. Do workers have unrestricted access to their passports or identity documents? Describe how workers are able to access their documents?

6.12.2

It shall be demonstrated that no contract substitution has occurred.

Specific Guidance: For 6.12.2: Contract substitution is the change of initial contract without prior consultation and agreement from the workers.

a. Is there evidence of contract substitution occurring?

b. Are foreign workers asked to sign a contract upon arriving in the receiving country? If yes, is that contract identical to the one signed in the country of origin?

c. Are workers given a copy of their employment contracts? If yes, is the contract identical to the one signed at the time of recruitment?

Interview with workers on 20 -22 December 2016

Perjanjian Kerja Bersama (Joint Agreement) Period 2015 - 2017 and PHL contract

There was no substitution contract occurred. Workers get the job and contract conforms to agreement between company and its workers.

N/A

6.12.3

(M) Where migrant/foreign/honorary workers are employed, a special worker policy and procedures and the evidence of implementation shall be available. Specific Guidance: For 6.12.3: The special labour policy should include: a. Statement of the non-discriminatory practices; b. No contract substitution;






COMPLIANCE (YES/NO)

c. Post-arrival orientation programme to focus especially on language, safety, labour laws, cultural practices etc.; d. Decent living conditions to be provided.

a. What is the company’s policy and procedures for temporary or foreign/migrant workers? Does the special labour policy include:

Statement of the non-discriminatory practices?

No contract substitution?

Post-arrival orientation programme with emphasis on language, safety, labour laws, cultural practices etc.?

The provision of decent living conditions?

b. Have the policies and procedures been implemented?

List of employee, interview with employee

There were no migrant workers in Negeri Lama Group Its verified during audit documentation list of employee, interview with employee and stakeholders

NA

6.132

Growers and millers respect human rights. Guidance: See Criteria 1.2, 2.1 and 6.3 All levels of operations include contracted third parties (e.g. those involved in security). Regulations related to the Human Rights refer to the Act No. 39 year 1999 regarding Human Rights.

6.13.1 (M) A policy to respect human rights shall be documented and communicated to all levels of the workforce and operations.

a. Is there a company policy on human rights?

b. How is this communicated to all employees, including outsourced workers, customers and suppliers? If

- Company Policy dated 1 December 2014.

- Attendance list worker. - Interview with stakeholder on

22 December 2016

Policy to respect human rights has been documented in Kebijakan Perusahaan dated 1st December 2014. Top management has commitment to respect human right refers to internationally recognised human rights set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work. The document has been communicated to all

YES






COMPLIANCE (YES/NO)

by training, how often is the training conducted?

c. Who has the task of communicating the policy internally and externally?

d. Does the company have any outstanding cases of human rights violations?

levels of the workforce and operations based on public consultation with labour union, worker and gender committee.

The policy has been communicated to all employees, including outsourced workers, customers and suppliers by socialization/dissemination. Socialization was conduct regularly once a year.

Person in charge to communicating the policy internally are Public Officer and Estate Manager.

During audit and based on verification on public consultation with stakeholders in 22 December 2016 and interview with employee could be demonstrated that there was no cases of human rights violations in Negeri Lama Group.



PRINCIPLES 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS




COMPLIANCE (YES/NO)

7.1

A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations. Guidance: The result of Strategic Environment Study (Kajian Lingkungan Hidup Strategis/KLHS) conducted by the authority shall be a major consideration in the new land development and planting. See also Criteria 5.1 and 6.1. Implementation of independent social and environment impact assessment may use AMDAL as part of the process. However, it is the company’s responsibility to provide objective and appropriate evidence to the audit team that the full requirements of a Social and Environment Impact Analysis (SEIA) are met for all aspects of plantation and mill operation, and captures all changes over time.

The terms of reference should be defined and impact assessment should be carried out by accredited independent experts, in order to ensure an objective process. A participatory methodology including external stakeholder groups is essential to the identification of impacts, particularly social impacts. Stakeholders such as local communities, government and NGOs should be involved through interviews and meetings, and by reviewing findings and plans for mitigation.

It is recognised that oil palm development can cause both positive and negative impacts. These developments can lead to some indirect/secondary impacts which are not under the control of individual growers and millers. To this end, growers and millers should seek to identify the indirect/secondary impacts within the SEIA, and where possible work with partners to explore mechanisms to mitigate the negative indirect impacts and enhance the positive impacts.

Plans and field operations should be developed and implemented to incorporate the results of the assessment. One potential outcome of the assessment process is that the development, partially or entirely, may not proceed because of the magnitude of potential impacts.

For smallholder schemes, the scheme management should address this criterion. For individual smallholders this criterion does not apply

For new planting with areas ≤ 3000 Ha, the assessment may be conducted internally or externally. And for new planting with areas > 3000 Ha, the assessment shall be conducted externally.

For new planting with area > 3000 Ha needs a comprehensive and independent assessment which may be in the form of AMDAL (SEIA) while areas ≤ 3000 Ha requires Upaya

Pengelolaan Lingkungan Hidup (UKL) – Upaya Pemantauan Lingkungan Hidup (UPL). Social and Environment Assessment at minimum must cover: a. Assessment of the impacts of all major planned activities, including planting, mill operations, roads and other infrastructure; b. Assessment, including stakeholder consultation, of High Conservation Values (see Criterion 7.3) that could be negatively affected; c. Assessment of potential effects on adjacent natural ecosystems of planned developments, including whether development or expansion will increase pressure on nearby

natural ecosystems; d. Identification of watercourses and wetlands and assessment of potential effects on hydrology and land subsidence of planned developments. Measures should be planned and

implemented to maintain the quantity, quality and access to water and land resources; e. Baseline soil surveys and topographic information, including the identification of steep slopes, marginal and fragile soils, areas prone to erosion, degradation, subsidence, and






COMPLIANCE (YES/NO)

flooding; f. Analysis of type of land to be used (forest, degraded forest, cleared land); g. Analysis of land ownership and user rights; h. Analysis of current land use patterns; i. Assessment of potential social impacts on surrounding communities of a plantation, including an analysis of potential effects on livelihoods, and differential effects on women

versus men, ethnic communities, and migrant versus long-term residents; j. Identification of activities which may generate significant GHG emissions. If AMDAL or UKL-UPL documents still do not cover point a to j, additional social and environment impact assessment shall be conducted. If internal assessment identifies sensitive social and environment issues or areas, then independent assessment shall be conducted. Documents of environment impact assessment are the environment documents based on the regulations, such as: a. Environmental Impact Assessment (Analisis Mengenai Dampak Lingkungan Hidup/AMDAL) for plantation with areas of > 3000 Ha b. Environmental Management Effort (Upaya Pengelolaan Lingkungan Hidup/UPL) and Environmental Monitoring Effort (Upaya Pemantauan Lingkungan Hidup/UKL) for

plantation with areas of < 3000 Ha. c. Environmental Management Document (Dokumen Pengelolaan Lingkungan Hidup/DPLH) d. Environmental Evaluation Document (Dokumen Evaluasi Lingkungan Hidup/DELH) e. Environmental Information Performance (Penyajian Informasi Lingkungan Hidup/PIL) f. Environmental Evaluation Performance (Penyajian Evaluasi Lingkungan Hidup/PEL) g. Environmental Evaluation Study (Studi Evaluasi Lingkungan Hidup/SEL) h. Environment Management and Monitoring Document (Dokumen Pengelolaan dan Pemantauan Lingkungan Hidup/DPPL) i. Declaration Letter for Managing and Monitoring Environment (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup/SPPL) j. And other documents required by the regulation. Regulations relate to the environment documents, such as: a. Government Regulation No. 27 year 2012 regarding Environment Permit b. Regulation of the Minister of Environment No. 13 year 2010 regarding Environmental Management and Monitoring Effort (UKL-UPL) and Declaration Letter for Managing and

Monitoring Environment (SPKL) c. Regulation of the Minister of Environment No. 5 year 2012 regarding Environmental Evaluation Document (DELH) d. Regulation of the Minister of Environment No. 14 year 2010 regarding Environmental Management and Monitoring Document (DPPL) e. Regulation of the Minister of Environment No.12 year 2007 regarding Environmental Management and Monitoring Document for Business and or Activities, with No

Environmental Management Document. f. Regulation of the Minister of Environment No. 5 year 2012 regarding Types of Business Obliged to Have Amdal g. Regulation of the Minister of Environment No. 8 year 2006 regarding Guidance for AMDAL preparation h. Regulation of the Minister of Environment No. 17 year 2012 regarding Involvement of Community and Information Transparency in the AMDAL Process i. Decree of the Head of Bapedal No. No. 299 year 1996 regarding Technical Guidance of Social Aspects for AMDAL preparation j. Regulation of the Minister of Environment No. 11 year 2008 regarding Competence Requirements for AMDAL preparation documents and Requirements for Training Institutions






COMPLIANCE (YES/NO)

in Conducting Training for AMDAL Competency

7.1.1 (M) An independent social and environmental impact assessment (SEIA), undertaken through a participatory methodology including the relevant affected stakeholders, shall be

documented.

a. Is there any new plantings or operations, or expanding existing ones by the company? What is the size of the new planting area?

b. Has an independent social and environmental impact assessment (SEIA) been documented for the new plantings?

c. Are the impact assessments prepared by accredited independent experts?

d. Are all environmental and social impacts adequately identified?

e. Is the SEIA undertaken based on the scope of operation?

f. Is the SEIA undertaken in a participatory manner, including the relevant affected stakeholders?

g. Does the SEIA assessment include and as a minimum: • Assessment of the impacts of all

major planned activities, including planting, mill operations, roads and other infrastructure?

• Assessment, including stakeholder consultation, of High Conservation Values (see Criterion 7.3) that could be negatively affected?

• Assessment of potential effects

Document of ANDAL, RKL RPL #PC.220/383/B/II/1994

The organisation did not acquire any new land after 2005. It was noted that there was no ongoing progress of new land axquisition during interview with stakeholders.

NA






COMPLIANCE (YES/NO)

on adjacent natural ecosystems of planned developments, including whether development or expansion will increase pressure on nearby natural ecosystems?

• Identification of watercourses and wetlands and assessment of potential effects on hydrology and land subsidence of planned developments. Measures should be planned and implemented to maintain the quantity, quality and access to water and land resources?

• Baseline soil surveys and topographic information, including the identification of steep slopes, marginal and fragile soils, areas prone to erosion, degradation, subsidence, and flooding?

• Analysis of type of land to be used (forest, degraded forest, cleared land)?

• Analysis of land ownership and user rights?

• Analysis of current land use patterns?

• Assessment of potential social impacts on surrounding communities of a plantation, including an analysis of potential effects on livelihoods, and differential effects on women versus men, ethnic communities, and migrant versus long-term residents?






COMPLIANCE (YES/NO)

• Identification of activities which may generate significant GHG emissions?

h. What were the main findings of the assessment?

i. Were secondary impacts of oil palm development identified in the SEIA?

7.1.2 Appropriate management planning and operational procedures shall be developed and implemented to avoid or mitigate identified potential negative impacts.

a. Does the findings of the SEIA uncover any negative impacts? If yes, has a management plan and operational procedures been developed to mitigate the negative impacts?

b. Has the management plan and operational procedures been implemented?

NA There was no new planting since November 2005. There was only replanting. NA

7.1.3

Where the development includes an outgrower scheme (skema kemitraan), the impacts of the scheme and the implications of the way it is managed shall be given particular attention. Specific guidance: For 7.1.3. : Outgrower scheme is a farmer selling the FFB through exclusive contract to the growers and millers. Schemed smallholders (plasma) included into this scheme.

a. Are any outgrowers involved in the new plantings?

b. Has management prepared a plan for the outgrower scheme?

c. Does the SEIA include an assessment of impacts and the implications of the way the outgrower scheme is managed?







COMPLIANCE (YES/NO)

7.2

Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations. Guidance: These activities can be linked to the Social and Environmental Impact Assessment (SEIA) (see Criterion 7.1) but need not be done by independent experts.

Soil surveys should be appropriate to identify soil suitability of oil palm cultivation for the scale of operation.

Maps of Soil suitability or soil survey should be established in line with the operational scale and include information on soil types, topography, hydrology, rooting depth, moisture availability, stoniness and fertility to ensure long-term sustainability of the development. Soils requiring appropriate practices should be identified (see Criteria 4.3 and 7.4). This information should be used to plan planting programs, etc. Measures should be planned to minimize erosion through appropriate use of heavy machinery, terracing on slopes, appropriate road construction, rapid establishment of land cover, protection of riverbanks, etc. Areas located within the plantation perimeters that are considered unsuitable for long-term oil palm cultivation will be delineated in plans and included in operations for conservation or rehabilitation as appropriate (see Criterion 7.4).

Assessing soil suitability is also important for smallholders, particularly where there are significant numbers operating in a particular location. Information should be collected on soil suitability by companies planning to purchase Fresh Fruit Bunches (FFB) from outgrowers scheme (skema kemitraan) in certain location. Companies should assess this information and provide information to smallholders involving in the outgrowers scheme, and/or in conjunction with relevant government/public institutions and other organizations (including NGOs) provide information in order to assist independent smallholders to grow oil palm sustainably.

One of referred guidances is on the table 1 (page. 6) regarding Land Suitability Criteria for Oil Palm in the Technical Guidance for Developing Oil Palm Estate issued by Directorate General of Estate Crops, Ministry of Agriculture, 2006.

7.2.1 (M) Soil suitability maps or soil surveys adequate to establish the long-term suitability of land for oil palm cultivation shall be available and taken into account in plans and operations.

a. Are soil suitability/survey maps for the planted areas available or in place?

Is the map adequate to establish the long-term suitability of land for oil palm cultivation?

Are the soil suitability maps or soil surveys appropriate to the scale of operation?

Does the soil suitability maps or soil surveys include information on soil types, topography, and hydrology, rooting depth,

Topographic Map, Slope Class Maps and Map Soil Type and Slope Class Map scale 1: 20,000

Results of land surveys were presented in several maps: Topographic Map, Slope Class Maps and Map Soil Type and Slope Class Map scale 1: 20,000.

Area of plantation has been located within the plantation perimeters that considering area for conservation.

The organisation has plan to purchase FFB from potential developments of independent suppliers but not from independent supplier in particular location, such as forest area or illegal area.

Soil map and land suitability was available in scale 1 : 20,000, projection system: Universal Transverse Mercator, Datum: WGS 84, Zone: 47 M,

Central Meredien: E 99°. Soil classification are as follows:

KNU

Yes






COMPLIANCE (YES/NO)

moisture availability, stoniness and fertility?

Do the soil suitability maps or soil surveys identify soils requiring appropriate practices?

b. Are there any areas located within the plantation perimeters that are considered unsuitable for long-term oil palm cultivation?

Are such areas delineated in the plans?

Are there areas set aside for conservation?

Or are there plans for rehabilitation as appropriate?

c. Does the company plan to purchase Fresh Fruit Bunches (FFB) from potential developments of independent suppliers in a particular location?

d. If yes, the following information should be obtained:

Is information on soil suitability collected and assessed?

Has the company provided information on soil suitability to the independent smallholders in order to assist them to grow oil palm sustainably?


(%) Ha %




Typic Haplosaprists (peat 1 - 3 m)

0 - 3 1,561 38.7

Typic Haplosaprists (peat > 3 m) 0 - 3 1,280 31.6

KAK


(%) Ha %




Typic Haplosaprists (peat 1 - 3 m)

0 - 3 583 22.0

Typic Haplosaprists (peat > 3 m) 0 - 3 557 21.1

7.2.2 Topographic information adequate to guide the planning of drainage and irrigation systems, roads and other infrastructure shall be available.

a. Does the area where plantings are Topographic Map, Slope Class

Maps and Map Soil Type and Slope Based on the above mentioned maps, there were plantings in area that require drainage or irrigation. The company has established adequate

Yes






COMPLIANCE (YES/NO)

done require drainage or irrigation?

b. If yes, is there adequate topographic information to guide the planning of drainage and irrigation systems?

c. Is the topographic information and best practices taken into consideration during the development of roads and infrastructure?

Class Map scale 1: 20,000 topographic information to guide the planning of drainage and irrigation systems. The topographic information and best practices were taken into consideration during the development of roads and infrastructure.

7.3

New plantings since November 2005 have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values. Guidance: This Criterion applies to forests and other vegetation types. This applies irrespective of any changes in land ownership or farm management that have taken place since November 2005 unless if previous owner have conducted HCV assessment.

HCVs may be identified in restricted areas of a landholding, and in such cases new plantings can be planned to allow the HCVs to be maintained or enhanced.This refers to the Guidance for HCV Management and Monitoring approved by the RSPO.

The HCV assessment process requires appropriate training and expertise, and will include consultation with local communities, particularly for identifying social HCVs. HCV assessments should be conducted according to the Guidance for Identifying HCV in Indonesia (HCV Toolkit Indonesia) of 2008 or its revision.

Developments should actively seek to utilise previously cleared and/or degraded land on mineral soil. Plantation development should not put direct or indirect pressure on primary forests and HCV through the use of all available agricultural land in an area.

Although the planned development is consistent with the landscape planning by the local and national government, the requirements of protecting HCV still shall be met.

For new planting with areas ≤ 3000 Ha, assessment of HCV can be conducted internally and externally. If the assessment of HCV is conducted internally, in accordance with the scheme of HCV RSPO using ALS system, assessor team leader of HCV shall be an assessor who has obtained license of HCV Assessor from HCVRN. Peer review from the competent party shall be conducted referring to the Common Guidance for the Identification of HCV 2013. For the new planting with the area > 3000 Ha, the assessment of HCV shall be conducted by the external party who has obtained license of HCV Assessor from HVCRN.

In case of small areas located either in hydrologically sensitive landscapes or in HCV areas where conversion can jeopardize large areas or species, the HCV assessment shall be conducted by independent assessor who has obtained license of HCV Assessor from HCVRN (see Guidance: Criterion 7.2). HCV areas can be very small. Once established, new development should comply with Criterion 5.2.

7.3.1

(M) There shall be evidence that no new plantings have replaced primary forest, or any area required to maintain or enhance one or more High Conservation Values (HCVs), since November 2005. New plantings shall be planned and managed to best ensure the HCVs identified are maintained and/or enhanced (see Criterion 5.2).

Specific Guidance:






COMPLIANCE (YES/NO)

For 7.3.1: Evidence should include historical remote sensing imagery which demonstrates that there has been no conversion of primary forest or any area required to maintain or enhance one or more HCV. HCV Assessment should apply satellite or aerial photographs, land use maps and vegetation maps should be used to inform the HCV assessment.

Where land has been cleared since November 2005, and without a prior and adequate HCV assessment, it will be excluded from the RSPO certification programme until an adequate HCV compensation plan has been developed and accepted by the RSPO.

a. Since November 2005, have any new plantings replaced primary forest, or any area required to maintain or enhance one or more High Conservation Values (HCVs)? If yes, was an adequate HCV assessment carried out prior to the clearing of the land?

b. Where HCVs have been identified on the land that is intended for new plantings, have new plantings been planned and managed to best ensure the HCVs identified are maintained and/or enhanced (see Criterion 5.2)?

c. Are there finalised HCV maps and areas endorsed/signed off by management showing type of HCV and area coverage (ha)?

d. Has the company comply with NPP procedures? i.e. NPP documents was submitted and put for public notification.

e. Is CB verification of NPP documents include field verification? If not, field verification of HCV is required during certification audit.

f. Where land has been cleared since November 2005, and without a prior and adequate HCV assessment, is







COMPLIANCE (YES/NO)

there evidence that an adequate HCV compensation plan for the affected area has been developed and accepted by the RSPO?

7.3.2 (M) Reports of comprehensive HCV assessment, which involves stakeholder consultation and includes record of land-use change since November 2005, shall be available. This HCV assessment shall be conducted prior to any conversion or new planting.

a. Is the prepared HCV assessment comprehensive? Was the assessment prepared in consultation with the affected stakeholders prior to any conversion or new planting?

b. Do the HCV assessments include land use change analysis to determine changes to the vegetation since November 2005? (This analysis shall be used, with proxies, to indicate changes to HCV status)


7.3.3 Records of land preparation and clearing dates shall be available.

a. Are the dates of land preparation and

commencement recorded?


7.3.4 (M) An action plan shall be developed that describes operational actions consequent to the findings of the HCV assessment, and that references the grower’s relevant operational procedures (see Criterion 5.2).

a. Has the company developed an action plan that describes operational actions consequent to the findings of the HCV assessment?

b. Does the action plan reference the grower’s relevant operational







COMPLIANCE (YES/NO)

procedures (see Criterion 5.2)?

7.3.5

Evidence of consultation with the affected community shall be available in order to identify the area required by such community to fulfill its basic needs, by considering the positive and negative changes to the livelihood as a result of plantation operations. Such matters shall be included in the HCV analysis and management plan (see Criteria 5.2). Specific Guidance: For 7.3.5: The management plan will be adaptive to changes in HCV 5 and 6. Decisions will be made in consultation with the affected communities.

a. Have areas required by affected communities to meet their basic needs, taking into account potential positive and negative changes in livelihood resulting from proposed operations, been identified in consultation with the communities?

b. Have these areas been incorporated into HCV assessments and management plans (see Criterion 5.2)?


7.4

Extensive planting on steep terrain, and/or marginal and fragile soils, including peat, is avoided. Guidance: The process of identifying fragile and marginal soil should be conducted after getting Plantation Business Permit (IUP)

Total area planting on fragile soils including peat whitin the new development shall not be greater than 100 Ha or 20% of the total area, whichever is smallest (see Criterion 4.3). Adverse impacts may include hydrological risks or significantly increased risks (e.g. fire risk) in areas outside the plantation (see Criterion 5.5). The legal aspect of compliance within this national interpretation document shall follow the changed laws and regulations but should at least meet the above minimum limit.

Planting on peat soils should not be conducted on peat with ≥3 m depth. If planting conducted on peat with <3 m depth, then the area (as regulated by Regulation of the Minister of Agriculture No. 14 year 2009: Guidance on Peatland Utilization for Oil Palm Cultivation) shall meet the following requirements: a. Within designated cultivation area b. Whereas the proportion of ≤ 3 m depth of peat and mineral soil (if any) is minimal 70% of the total concession area






COMPLIANCE (YES/NO)

c. The mineral soil below peat layer is not quartz sand or acidic sulfate soil d. The peat soils maturity level is mature (sapric) e. The fertility level is eutropic Cultivation on peatland must also comply with Government Regulation No 71 year 2014 concerning the Protection and Management of Peatland Ecosystems

Excessive slope is defined as slope more than 40% referring to Regulation of the Minister of Agriculture No.11/Permentan/OT.140/3/2015 regarding Guidance of Indonesia Sustainable Palm Oil and the Regulation of the Minister of Agriculture No. 47 year 2006 regarding General Guidance for Agriculture at Mountain Area.

Soil conservation measures (such as terracing, individual terrace, legume cover crops, silt pit, frond stacking, etc.) should be conducted.

Soil suitability should be determined using crop and environmental suitability criteria.

Those identified as marginal and/or problematic should be avoided if the soil cannot be improved through agricultural cultivation.

The risky and marginal soils may include sandy soils, low organic content soils, and potential or actual acid sulphate soils. Suitability of these soils is also influenced by other factors including rainfall, terrain and management practices.

These areas may only be developed for new plantations which have adequate management plans based on best management practices. Failure due to extensive plantings should be avoided on these soil types.

Fragile soils on which extensive planting shall be avoided include peat soils, mangrove sites and other wetland areas.

This activity should be integrated with the social and environmental impact assessment (SEIA) required by Criterion 7.1.

Excessive planting on fragile soil refer to Annex 2 Generic RSPO P&C, 2013.

Wetland definition refers to RAMSAR.

7.4.1 (M) Indicative maps showing marginal and fragile soils, including excessive gradients and peat soils, shall be available and used to identify areas to be avoided. Minor to Major

a. Are there maps identifying marginal and fragile soils, including excessive gradients and peat soils?

b. If peat is present, does the map show the extent, nature, and depth of peat?

c. Are the maps used to identify areas that are inappropriate for planting?

d. Have the maps been incorporated for

Topographic Map, Slope Class Maps and Map Soil Type and Slope Class Map scale 1: 20,000

Based on Map of Soil type Unit, most of HSJ plantation area are peatland. The mentioned map shows the extent, nature and depth of peat. The map does used to identify areas that are inappropriate for planting. The map have been incorporated for use in the social and environmental impact assessment (AMDAL). The company has demonstrated that planting on extensive areas of peat soils and other fragile soils have been avoided.

YES






COMPLIANCE (YES/NO)

use in the social and environmental impact assessment (SEIA)?

e. Is there evidence that planting on extensive areas of peat soils and other fragile soils have been avoided?

7.4.2 (M) Where limited planting on fragile and marginal soils, including peat, is proposed, a documented plan shall be developed and implemented to protect them without incurring adverse impacts.

a. Are there plans to protect planted areas on fragile and marginal soils, including peat from adverse impacts?

b. Does the plan take into consideration specific control and NI thresholds, including:

Slope limits;

List of soil types that need to be avoided, especially peat soil;

Proportion of plantation areas that can include marginal / fragile soil.

c. Has the plan been implemented?

SOP Land Preparation (AA-APM-OP-1100.02-R1)

Consolidation (AA-APM-OP-1100.16-R1)

Soil and Water Conservation (AA-APM-OP-1100.05-R1)

The organisation has management strategy for planting on slopes above certain limit such as terracing, as referred to company’s SOP and work instructions. The work instruction described preparation for planting including planting on slopes area has been developed by organisation. System for planting on slopes area was provided through terracing, levelling of terrace, planting legume cover crops and determining of planting space.

Practices to control and minimize erosion have been applied by :

Terracing

Making the catchment where runoff water, called: “Tapak Kuda”.

Making the catchment where runoff water, called “Rorak”.

Planting legume cover crop.

YES

7.5

No new plantings are established on local peoples’ land where it can be demonstrated that there are legal, customary or user rights, without their free, prior and informed consent. This is dealt with through a documented system that enables these and other stakeholders to express their views through their own representative institutions. Guidance: This activity should be integrated with the Social and Environmental Impact Assessment (SEIA) required by Criterion 7.1.

Where new plantings are considered to be acceptable by the communities, management plans and operations should minimise the adverse impacts (such as disturbing sacred sites) and promote positive ones. Agreements with indigenous people, local communities and other stakeholders should be made without coercion or other undue influence (see Guidance for Criterion 2.3).

Where communities decline to release lands rights on these terms the grower or miller must explore legal alternatives such as leasing or renting or securing community land or enclaving or other mutually agreed schemes or decide not to go ahead with its proposed development.






COMPLIANCE (YES/NO)

Relevant stakeholders include those affected by or concerned with the new plantings.

Free, prior and informed consent (FPIC) should be applied to all RSPO members throughout the supply chain. Please refer to FPIC guidelines approved by the RSPO (RSPO endorsed Free, Prior and Informed Consent Guide for RSPO Members, November 2015).

Customary and user rights shall be demonstrated through participatory mapping as part of the FPIC process.

Verification evidence may be in the form of documents on socialization to the affected community, agreement or disagreement from the community, communication and consultation with the community.

7.5.1 (M) Evidence shall be available that affected local peoples understand they have the right to say ‘yes’ or ‘no’ to operations planned on their lands before and during initial discussions, during the stage of information gathering and associated consultations, during negotiations, and up until an agreement with the grower/miller is signed and ratified by these local peoples (see Criteria 2.2, 2.3, 6.2, 6.4 and 7.6)

a. Does the new planting area include ‘local people’s land’?

b. If yes, has the community given their consent?

c. Is there evidence to demonstrate that the consent/agreement has been given?

d. Has the community been given the opportunity to say ‘no’ to the proposed development?

e. Are the principles of the FPIC process followed?


7.6

Where it can be demonstrated that local peoples have legal, customary or user rights, they are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements. Guidance: See Criteria 2.2, 2.3 and 6.4 and associated Guidance. The requirements include indigenous people, as regulated by, such as, the Act No. 5 year 1994 regarding Endorsement of UN Convention on Biodiversity. Please refer to FPIC guidelines approved by the RSPO (RSPO endorsed Free, Prior and Informed Consent Guide for RSPO Members, November 2015).

7.6.1 (M) Records of identification and assessment of legal, customary and user rights shall be available. Specific Guidance:






COMPLIANCE (YES/NO)

For 7.6.1: This activity shall be integrated with the social and environmental impact assessment (SEIA) required by Criterion 7.1.

a. Does the SEIA include the identification and assessment of legal, customary and user rights of the area?

b. Does the company have SOPs to identify and assess any legal, customary and user rights of the local peoples?

c. Is there any known notification from the stakeholders claiming to have legal, customary and/or user rights on the land for the new planting area?

d. Has the claim been identified and assess according to the protocol/SOP? Does the process follow and respect the FPIC principles?

e. Has the process of identification and assessment been recorded/ documented and made publicly available?


7.6.2 (M) A procedure for identifying people entitled to compensation shall be available.

a. Does the company have a system in place to identify people and/or community groups entitled to compensation?







COMPLIANCE (YES/NO)

b. Is the system documented?

c. Does the system follow and respect the FPIC principles?

7.6.3 (M) Records of calculation system and distribution of fair compensation shall be available

a. Does the company have a system in place to calculate and distribute fair compensation (monetary or otherwise)?

b. Is the system documented and publicly made available?

c. Does the system follow and respect the FPIC principles?


7.6.4 Communities that have lost access and rights to land for plantation expansion shall be given opportunities to benefit from plantation development.

a. Does the company provide communities that have lost access and rights to land for plantation expansion opportunities to benefit from plantation development?


7.6.5 The process and outcome of any compensation claims shall be documented and made available to the affected communities and their representatives.

a. Is the process and outcome of any compensation claims documented and made publicly available?


7.6.6 Evidence shall be available that the affected communities and rights holders have access to information and advice that is independent of the project proponent, concerning the legal, economic, environmental and social implications of the proposed operations on their lands.






COMPLIANCE (YES/NO)

Specific Guidance: For 7.6.6: Growers and millers will confirm that the communities (or their representatives) gave consent to the initial planning phases of the operations prior to Plantation Business Permit (Izin Usaha Perkebunan/IUP) and if requested, Land Title (Hak Guna Usaha (HGU)/Hak Guna Bangunan (HGB)) to the grower and miller. There is documented evidence that communities were informed prior to being asked to release lands to growers and millers that a legal consequence of the grower or miller acquiring a HGU/HGB over their lands is that this will permanently extinguish their land rights within the same area. Related to 7.6.6, the evidences can be a company’s policy to give community freedom to get information, and also socialization to the affected community.

a. Is there record to show that the community and rights holders have freedom to access information and independent advisor(s) concerning the legal, economic, environmental and social implications of the proposed operations on their lands?

b. Is there evidence to show that the company has sought the community and the right holders’ consent to the initial planning phases of the operations prior to the new issuance of a concession or land title?

c. Did the communities (or their representatives) give consent to the initial planning phases of the operations prior to the new issuance of a concession or land title?


7.7 No use of fire in the preparation of new plantings other than in specific situations, as identified in the ASEAN guidelines or other regional best practice.

7.7.1 (M) Records of zero burning implementation on land clearing, referring to the ASEAN Policy on zero burning (2003) and recognised techniques based on the existing regulations shall be available.

a. Is there evidence of land preparation

by burning?

b. (The auditors shall conduct site







COMPLIANCE (YES/NO)

verification of the newly planted site which will include interviews with workers).

c. Was land prepared using the burn method due to reasons or specific situations, as identified in the ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burnings’ 2003, or comparable guidelines in other regions?

d. If the burn method has been used for land preparation, has the company complied with the requirements of ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions?

e. Is document showing proper justification for such activity available?

7.7.2

In exceptional cases where fire has to be used for preparing land for planting, there shall be evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions. Specific guidance For 7.7.2 : Fire should be used only where an assessment has demonstrated that it is the most effective and least environmentally damaging option for minimizing the risk of severe pest and disease outbreaks, and exceptional levels of caution are required for use of fire on peat. This should also refer to the ASEAN Policy on Zero Burning (2003) and respective national environment regulations.

a. In exceptional cases where fire has to be used for preparing land for planting, is there evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or







COMPLIANCE (YES/NO)

comparable guidelines in other regions?

b. Was the activity incorporated in the SEIA report?

c. What were the mitigation measures? Was it implemented?

7.8

Preamble

It is noted that oil palm and all other agricultural crops emit and sequester greenhouse gases (GHG). There has already been significant progress by the oil palm sector, especially in relation to reducing GHG emissions relating to operations. Acknowledging both the importance of GHGs, and the current difficulties of determining emissions, the following new Criterion is introduced to demonstrate RSPO’s commitment to establishing a credible basis for the Principles and Criteria on GHGs.

Growers and millers commit to reporting on projected GHG emissions associated with new developments. However, it is recognised that these emissions cannot be projected with accuracy with current knowledge and methodology.

Growers and millers commit to plan development in such a way to minimise net GHG emissions towards a goal of low carbon development (noting the recommendations agreed by consensus of the RSPO GHG WG2).

Growers and millers commit to an implementation period for promoting best practices in reporting to the RSPO, and after December 31st 2016 to public reporting. Growers and millers make these commitments with the support of all other stakeholder groups of the RSPO.

7.8

New plantation developments are designed to minimise net greenhouse gas emissions. Guidance This Criterion covers plantations, mill operations, roads and other infrastructure. It is recognised that there may be significant changes between the planned and final development area, hence the assessment may need to be updated before the time of implementation.

Public reporting is desirable, but remains voluntary until the end of the implementation period.

Once established, new developments should report on-going operational, land use and land use change emissions under Criterion 5.6.

According to the recommendation from RSPO GHG Working Group 2, the total carbon emission (above and below ground) from new development area ideally is not bigger than carbon that can be absorbed in one rotation period of all new developments (i.e. average of oil palm trees, riparian buffer zone, and the set aside forest area). To help achieving this, the plantation should be developed in area with low carbon stock (i.e. mineral soil, area with low biomass, etc) or within area that currently is being utilized for agriculture or intensive plantation whose owner has agreed to convert the areas into oil palm. The agreed methodology to assess and report on carbon stock and emission sources as well as default number for the both estimation is now being developed by RSPO.

As guidance, low carbon stock areas are defined as areas with (above and below ground) carbon stores, where the losses as a result of conversion are equal or smaller to the gains in carbon stock within the new development area, including set aside areas (non- planted area) for one rotation period.






COMPLIANCE (YES/NO)

7.8.1

(M) The carbon stock of the proposed development area and major potential sources of emissions that may result directly from the development shall be identified and estimated. Specific Guidance: For 7.8.1: GHG identification and estimates can be integrated into existing processes such as HCV and soil assessments.

The RSPO carbon assessment tool for new plantings will be available to identify and estimate the carbon stocks. It is acknowledged that there are other tools and methodologies currently in use; the RSPO working group will not exclude these, and will include these in the review process.

The RSPO PalmGHG tool or an RSPO-endorsed equivalent will be used to estimate future GHG emissions from new developments using, amongst others, the data from the RSPO carbon assessment tool for new plantings.

Parties seeking to use an alternative tool for new plantings will have to demonstrate its equivalence to the RSPO for endorsement.

a. Is there an assessment conducted to identify and estimate the carbon stock in the proposed development area and major potential sources of emissions that may result directly from the development?

b. What are the tools and methodologies used to identify and estimate the carbon stock and potential sources of emission?

c. Has the results of the carbon stock assessment been submitted and reported to RSPO according to RSPO procedures and timeline?


7.8.2

Records of a plan to minimize net GHG emissions shall be available. Specific Guidance: For 7.8.2: Growers are strongly encouraged to establish new plantings on mineral soils, in low carbon stock areas, and cultivated areas, which the current users are willing to develop into oil palm. Millers are encouraged to adopt low-emission management practices (e.g. better management of palm oil mill effluent (POME), efficient boilers etc.) in new developments.

Growers and millers should plan to implement RSPO best management practices for the minimization of emissions during the development of new plantations Some efforts to minimise net GHG emissions, but not limited to: a. Avoiding high carbon stock area






COMPLIANCE (YES/NO)

b. Enriching HCV c. Improving carbon sequestration d. Minimising use of fossil fuel e. Implementing zero burning

a. Is there a plan to minimise net GHG emissions from new development?

b. Does this plan take into account avoidance of land areas with high carbon stocks, sequestration options and low-emission management practices?




PRINCIPLES 8: COMMITMENT TO CONTINUAL IMPROVEMENT IN KEY AREAS OF ACTIVITY




COMPLIANCE (YES/NO)

8.1

Growers and millers regularly monitor and review their activities, and develop and implement action plans that allow demonstrable continual improvement in key operations. Guidance: Growers should have a system to improve practices in line with new information and techniques, and a mechanism for disseminating this information throughout the workforce. For smallholders, there should be systematic guidance and training for continual improvement. The minimum specific performance for key indicators is based upon the existing regulations and best plantation practices (Criteria 4.2, 4.3, 4.4, and 4.5). Several standards related to Criteria 4.2, 4.3, 4.4, and 4.5:

Leaf analysis at least on yearly basis.

Soil analysis should be done periodically based on company’s consideration

Plantable slope < 40%.

BOD of effluent used forLand Application is maximum 5000 ppm, and for discharging to the water body is maximum 100 ppm

For planting on peat, the water table should be maintained at an average of at least 50 cm (40 – 60 cm) below ground surface measured with groundwater piezometer readings, or an average of 60 cm (between 50 – 70 cm) below ground surface as measured in water collection drains as per the Manual Best Management Practices for existing oil palm cultivation on peat, June 2012 or as per existing regulation if equal or shallower measured through a network of appropriate water control structures e.g. weirs, sandbags, etc. in fields, and watergates at the discharge points of main drains (Criteria 4.4 and 7.4).

Regulations regarding water table on peat may refer, but not limited, to: 1. Government Regulation No. 71 year 2014 regarding Protection and Management of Peat Ecosystem 2. Regulation of the Minister of Agriculture No. 14 year 2009 regarding Guideline of Oil Palm Cultivation on Peat 3. Regulation of the Minister of Agriculture No. 11 year 2015 regarding Guideline of Indonesia Sustainable Palm Oil Plantation (ISPO)

8.1.1

(M) The action plan for monitoring shall be available, based on a consideration of the social and environmental impacts and routine evaluation of the plantation and mill operations. As a minimum, these shall include, but are not necessarily be limited to:

Reduction in use of certain chemicals (Criterion 4.6);

Environmental impacts (Criteria 4.3, 5.1 and 5.2);

Waste reduction (Criterion 5.3);

Pollution and greenhouse gas (GHG) emissions (Criteria 5.6 and 7.8);

Social impacts (Criterion 6.1);

Optimising the yield of FFB production (Criterion 4.2)






COMPLIANCE (YES/NO)

a. Is there an action plan for continual improvement?

b. Describe the main components of the plan.

c. Has the action plan been implemented?

d. Provide examples of continual improvements that have been implemented.

e. Are history records available to develop the action plan?

f. Are records of implementation of the action plan available?

g. Does the action plan include strategies for: • Reduction in use of pesticides

(Criterion 4.6)? Is IPM widely implemented?

• Environmental impacts (Criteria 4.3, 5.1 and 5.2)?

• Waste reduction (Criterion 5.3)? • Pollution and greenhouse gas (GHG)

emissions (Criteria 5.6 and 7.8)? • Social impacts (Criterion 6.1)? • Optimising the yield of the supply

base?

h. Do growers have a system to improve practices in line with new information and techniques, and a mechanism for disseminating this information throughout the workforce?

Internal audit period April 2016

VE (Visit Engineering) Report. No. PNS-VE-FULL-01-16 dated 14th-17th September 2016.

OHS Objectives and programme period 2016

Kaizen Event KAK

VA (Visit Agronomy) Report KAK/VA/FULL02-16 for visit date 19 to 24 September 2016.


Internal audit was conducted within period April 2016 regarding the sustainable palm oil, included the environment and health and safety aspects. The corrective action was followed if there are any non-conformances raised. Moreover the organisation conducted monitoring and checking for mill operation performance through periodic visit of corporate engineering called VE (Visit Engineering), The Report sighted; No. Report. No. PNS-VE-FULL-01-16 dated 14th-17th September 2016 was sighted includes Mill key performance, assessment overall mill operations, process efficiency, plant maintenance, management supervision, manpower statement, production cost, EHS management system and sustainability. The corrective action plans was established and followed up by mill, the records was also evident. The records also sighted regarding objectives and programmes related to health and safety for each estates and mill; that for estates includes: to reduce the number of accidents and 5S programme; safety meetings and briefings for all employees and contractors; safety inspections. The objective and programmes for mill, includes: reduce the number accidents; preventive maintenance programme; PPE provisions and implementation of health surveillance. Within the OHS objective and programmes was included the time frame; person in charge and cost estimation. The monitoring of each objectives and programmes were conducted periodically by the person in charge.

Evidence of several improvements was shown, e.g.

Best Practice Agronomy:

• Increase productivity of circle racking.

• Increase harvesting productivity from 1.93 Ton/Ha become 2.1 Ton/Ha.

Reduction in use of certain chemicals:

• The organisation committed that Paraquat only used for specific species: a few species of ferns, such as: Stenochlaena and Lycopodiophyta.

• Reduction of Paraquat consumption

Environmental impacts:

YES






COMPLIANCE (YES/NO)

• Segregation of domestic water run off with industrial waste water by building trench around shell storage area to prevent contaminated water to open drainage

• Improvement in monitoring of fuel consumption by calibrating fuel injection pumps and check fuel nozzle pipe.

• Improvement in monitoring of domestic water consumption by installing flow meter to monitor water consumption in housing

• Recycle the water cooler turbine discharge water basin;

• Recycle the condensate water discharge water dilution;

• Minimize duration of mill cleaning to be every two weeks.

Waste reduction:

• Reduction in discharged waste water. The project including: Injection of water from hydro cyclone and blow down boiler to boiler chimney. It can prevent blow down boiler drain to water body, reduce waste water treated in WWTP.

Pollution and emissions:

• Reduction of potential particulate release to the atmosphere by increase boiler ash capture by the chimney

Social impacts

• Projects to improve social impacts are integrated within CSR program

• Monitoring and managing the positive and negative impact from social impact assessment (SIA)

• Improve and implementation the CSR program regularly

• Review social impact assessment every two years to improve the social relationship with stakeholders and affected parties.

• A monitoring action plan has been established after /social impact assessment and annual evaluation was also done to monitor result and progress of action. Most of the plans were executed and the result found was as expected (CSR, local recruitment, etc).






COMPLIANCE (YES/NO)

Biodiversity conservation

• Planting riparian zone/river border with barrier to erosion plant and native species to conserve riparian zone

• Monitoring of RTE species regularly to control the population dynamics of wildlife

• Sign board installation for HCV protection and awareness to conserve biodiversity and HCV area

Regular evaluation of plantation and mill operation was performed through internal and external audits. The coverage of the audit including production planning, production, power generation and utilization, consumable, process control, quality control – including waste water treatment, maintenance, occupational health and safety, FFB incoming and inspection, and laboratory. The above audit reports indicated that all gaps against standard operation procedure of plantation and operation were noted. Corrective action plan was issued and implemented to demonstrate effort for compliance as well as continual improvement.

A monitoring action plan has been established after AMDAL/social impact assessment and annual evaluation was also done to monitor result and progress of action. Most of the plans were executed and the result found was as expected (CSR, local recruitment, etc).



3.3.2 Mill Supply Chain Requirements

The FFB source is three (3) oil palm estate owned by PT. Hari Sawit Jaya, one (1) oil palm estate owned by PT. Andalas Intiagro Lestari and third party estates. PT. Hari Sawit Jaya and PT. Andalas Intiagro Lestari are subsidiary of PT. Inti Indosawit Subur (RSPO member number 1-0022-06-000-00. The third party estates are excluded from certification. All FFB are processed together, both from own estates (certified sources) and the third party estates. Therefore the Model selected is Mass Balance and RSPO Supply Chain Module E was used as audit criteria. The detail of FFB processed in Negri Lama II Mill is described in Table 7, Table 8 and Table 9 presented in this report. 3.3.2.1 Supply Chain Certification Standard

PART A COMPANY DETAIL

Company Name (covered by certification): PT. HARI SAWIT JAYA – Negri Lama 2 Mill

RSPO member name: PT. INTI INDOSAWIT SUBUR

RSPO member number: 1-0022-06-000-00

RSPO IT Platform Registration number: RSPO_PO1000003004

Site Address: Negeri Lama Seberang Village, Bilah Hilir District, Labuhan Batu Regency, North Sumatera IDN

Management Representative: Ms. Asrini Subrata

Site type: Palm Oil Mill

Site capacity: 45 MT FFB per hour (Permit 60 MT)



Certified palm product sold: 5,719.43 MT of Palm Kernel

Certified palm product used: 133,781.838 MT of FFB

App/Cert No: FMS40024

Audit Type: 1st Annual Surveillance Audit

SAI Global Auditor/Team: Eko Purwanto

Audit Date: 22/12/2016

Activity/Audit No: WI-887016

Audit objectives

To verify the volume of certified and uncertified FFB entering the mill and sold volume of RSPO certified producers.

Supply Chain Model:

Module E - CPO Mills (MB) Mass Balance

Pertinent record period:

December 2016 to November 2017

Estimated tonnage of certified palm product produced:

59,022.56 MT CPO and 11,955.88 MT Palm Kernel

Estimated of tonnage of non certified palm product produced

Depend on non certified FFB supply

String description:

Palm Oil Mill

Outsource activity(ies) (if any):

N/A

Independent third party(ies) performing outsource activity(ies): name, address and Capability

N/A



PART B SUPPLY CHAIN CERTIFICATION STANDARD

Requirements Audit Findings / Objective Evidence STATUS

( NC / AOC / C )

CPO MILLS (MB) MASS BALANCE SUPPLY CHAIN MODELS – MODULAR REQUIREMENTS

E.1 Definition

E.1.1. Certification for CPO mills is necessary to verify the volumes of certified and uncertified FFB entering the mill and volume sales of RSPO certified producers. A mill may be taking delivery of FFB from uncertified growers, in addition to those from its own certified land base. In that scenario, the mill can claim only the volume of oil palm products produced from processing of the certified FFB as MB.

E.2 Explanation

E.2.1. The estimated tonnage of CPO and PK products that could potentially be produced by the certified mill must be recorded by the CB in the public summary of the P&C certification report. This figure represents the total volume of certified palm oil product (CPO and PK) that the certified mill is allowed to deliver in a year. The actual tonnage produced should then be recorded in each subsequent annual surveillance report.

a. Has the estimated tonnage of CPO and PK products

(that could potentially be produced by the certified mill) been recorded by the certification body (CB) in the public summary of the P&C certification report ?

The estimated tonnage of CPO and PK products has been recorded by certification body, i.e.:

Certification audit:

Estimated CPO : 51,040 MT

Estimated PK : 10,640 MT

C




( NC / AOC / C )

ASA1:

Estimated CPO : 59,022.56 MT

Estimated PK : 11,955.88 MT

b. Does the figure represent the total volume of certified

palm oil product (CPO and PK) that the certified mill is allowed to deliver in a year ?

Yes, the figure does represent the total volume of certified palm oil product (CPO and PK) that the certified mill allowed to deliver in a year.

C

c. Does the actual tonnage produced have to then be recorded in each subsequent annual surveillance report ?

The actual tonnage produced has been recorded in each subsequent annual surveillance report, i.e:

ASA1:

Actual CPO : 31,012.85 MT

Actual PK : 5,726.99 MT

C

E.2.2. The mill must also meet all registration and reporting requirements for the appropriate supply chain through the RSPO supply chain managing organization (RSPO IT platform or book and claim).

a. The mill must also meet all registration requirements for the appropriate supply chain through the RSPO supply chain managing organization (RSPO IT platform or book and claim)?

PT. HARI SAWIT JAYA – Negri Lama II Mill has met all registration requirements for the appropriate supply chain through the RSPO supply chain managing organization (RSPO IT platform), with register number RSPO_PO1000003004.

C

b. The mill must also meet all reporting requirements for the appropriate supply chain through the RSPO supply chain managing organization (RSPO IT platform or book and claim)?

PT. HARI SAWIT JAYA – Negri Lama II Mill has met all reporting requirements for the appropriate supply chain through the RSPO supply chain managing organization (RSPO IT platform).

C




( NC / AOC / C )

E.3 Documented Procedure

E.3.1. The site shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements.

This shall include at minimum the following: a. Complete and up to date procedures covering the implementation of all the elements in these requirements; b. The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with

all applicable requirements. This person shall be able to demonstrate awareness of the site procedures for the implementation of this standard.

a. Does the site have written procedures and/or work instructions in place to ensure the implementation of all elements specified in these requirements ?

The Site has system documentation available on site to ensure the implementation of RSPO SCC requirements. The procedures are updated and appeared to be compliance with current standard.

AA-MPM-OP-1400.17-R4, dated February 25th, 2015, Procedure of Traceability. The procedure was established to ensure the production of sustainable and non-sustainable CPO/PK/CPKO produced by the Mill and shipped out could be traced to the suppliers of raw material, and also to ensure the palm oil production process could be described.

AA-MPM-OP-1400.18-R4, dated February 25th, 2015, Procedure of Book Keeping. The procedure described mechanism to monitor the supply chain of certified CPO, PK and CPK production are sustainable, from receipt of raw materials to the delivery of mill products (POM/KCP) and to ensure the record of number of

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( NC / AOC / C )

"certified" and "non-certified" CPO, PK and CPKO production generated by POM/KCP and shipped out from the mill are "balance" in each 3-months period.

AA-SM-405.2.R0, procedure of RSPO eTrace system

AA-MPM-OP-1400.02-R2, procedure of FFB Receiving

AA-MPM-OP-1400.03-R1, procedure of Sterilizer station

AA-MPM-OP-1400.06-R1, procedure of Clarifier station

AA-MPM-OP-1400.08-R1, procedure of Kernel station

AA-MPM-OP-1400.14-R2, procedure of Storage and Delivery.

b. Are procedures / work instructions completely covering the implementation of all the elements in these requirements?

Procedures and Work Instruction are completely covering the implementation of the elements in this requirement, i.e.:

FFB Receiving

FFB Processing

Production Recording (CPO and PK)

Product Delivery

Mill Daily Report

Three Monthly Mass Balance Report

Certified Product Claim

Record Keeping

Shipping Announcement in e Trace

C

c. Have the site had the role of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements ?

Based on the Procedure of Traceability, Top Management has assigned personnel who having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements, who is the Mill Manager, Mr. Andriyanto.

Weighing clerk responsible for data input and print out weighing card. Receiving of FFB was based on SPB (delivery

C




( NC / AOC / C )

note) covers whether are sustainable or non-sustainable. If sustainable then delivery note must covers:

- Estate name and block number - Year of planting - Date of harvesting - Certificate number - Batch number - Transporter identity.

All related personnel regarding Mill Manager, Head of Administration, weighing clerk, security, storage keeper etc. has been trained for refreshment of Traceability and Mass Balance on 13 August 2015 and 21 April 2015. Refreshment of sustainability awareness has been conducted in 22 April 2016.

d. Is the person able to demonstrate awareness of the site’s procedures for the implementation of this standard?

The assigned persons were able to demonstrate awareness of the site’s procedures for the implementation of RSPO SCC standard.

All employees contribute to implementation of RSPO SCC have been trained by competent persons. The latest training was performed on 13 August 2015 and 21 April 2015. Refreshment of sustainability awareness has been conducted in 22 April 2016.

C

E.3.2. The site shall have documented procedures for receiving and processing certified and non-certified FFBs.

a. Has the site had documented procedures for receiving certified FFBs ?

The Procedure of Traceability (AA-MPM-OP-1400.17-R4) and Mass Balance (AA-MPM-OP-1400.18-R4) have mentioned the mechanism for receiving certified FFBs. The system has separated the recording of certified and non-certified FFB.

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( NC / AOC / C )

b. Has the site had documented procedures for receiving non-certified FFBs?

The Procedure of Traceability (AA-MPM-OP-1400.17-R4) and Mass Balance (AA-MPM-OP-1400.18-R4) have mentioned the mechanism for receiving non-certified FFBs. The system has separated the recording of certified and non- certified FFB.

C

c. Has the site had documented procedures for processing certified FFBs?

The Procedure of Traceability (AA-MPM-OP-1400.17-R4) and Mass Balance (AA-MPM-OP-1400.18-R4) have mentioned the mechanism for processing certified FFBs. The selected RSPO SC model is Mass Balance, so the mill does not have to separate the process of certified FFBs from non-certified FFBs.

C

d. Has the site had documented procedures for processing non-certified FFBs?

The Procedure of Traceability (AA-MPM-OP-1400.17-R4) and Mass Balance (AA-MPM-OP-1400.18-R4) have mentioned the mechanism for processing non-certified FFBs. The selected RSPO SC model is Mass Balance, so the mill does not have to separate the process of certified FFBs from non-certified FFBs.

C

E.4 Purchasing and Goods In E.4.1. The site shall verify and document the volumes of certified and non-certified FFBs received.

a. Does the site verify and document the volumes of certified FFBs received ?

It was verified that receiving of FFB was traceable to the supply base unit. During weighing on weighbridge the FFB sources is identified; whether received from own estate (block number and division) or from third party. Weighing slip and receiving report issued clearly stated the weight off FFB received and its source (certified or non-certified).

The documented Mill Operation Summary has recapitulated FFB received from own estate and from third party. Based on

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( NC / AOC / C )

the report, certified FFB received from own estate from January to November 2016 was 137,094,247 Kg.

The site has two weighbridge, which are:

- Presica / 1801 / Serial No. NXF F10475 with maximum capacity of 50,000 Kg. The weighbridge has been calibrated by UPT Metrologi Rantau Prapat based on certificate No.510.3/167/MT.RP/16-TU dated 31 March 2016.

- Presica / PSC *801 / Serial No. GK.002262 with maximum capacity of 50,000 Kg. The weighbridge has been calibrated by UPT Metrologi Rantau Prapat based on certificate No.510.3/362/MT.RP/16-TU, May 2016.

Records of certified FFB received:

- Weighbridge card No.PNDA416101489 dated 21/12/2016 described the commodity was certified FFB, sourced from Aek Kuo Estate (KAK), Division 3, Block C03c, 300 bunches, SPB (FFB Delivery Note) #01627. Nett tonnage was 6,260 Kg. Time in 13.00, Time out 13.18. Transporter: Internal, unit: BK8635CA, driver Herman Tamba.

- Weighbridge card No.PNDA116122261 dated 21/12/2016 described the commodity was certified FFB, sourced from Negeri Lama Utara Estate (KNU), Division 2, Block B12b 300 bunches and B11q 450 bunches, SPB (FFB Delivery Note) #006759. Nett tonnage was 5,600 Kg. Time in 10.29, Time out 10.43. Transporter: Internal, unit: BK9978CG, driver S. Pasaribu.

- Laporan Harian Pabrik (Mill Daily Report) dated 30 November 2016, mentioned: certified FFB received on that day was 584,160 Kg, in November was 17,284,180 Kg, and




( NC / AOC / C )

until November was 137,094,247 Kg.

b. Does the site shall verify and document the volumes of non-certified FFBs received ?

It was verified that receiving of FFB was traceable to the supply base unit. During weighing on weighbridge the FFB sources is identified; whether received from own estate (block number and division) or from third party. Weighing slip and Mill Daily Report issued clearly stated the weight off FFB received and its source (certified or non-certified).

The documented Mill Operation Summary has recapitulated FFB received from own estate and from third party. Based on the report, non certified FFB received from own estate from January to November 2016 was 48,269,676 Kg.

Records of non-certified FFB received:

- Weighbridge card No.PNDA516106336 dated 05/10/2016 described the commodity was 3rd party FFB, sourced from ESTERIA M QQ SMA 1. Nett tonnage was 6,691 Kg. Time in 09.15, Time out 09.39. Transporter BK9425YH, driver Ganong.

- Weighbridge card No.PND516106298 dated 03/10/2016 described the commodity was 3rd party FFB, sourced from SUMIYATIK-AB QQ SMA 1. Nett tonnage was 8,382 Kg. Time in 08.43, Time out 09.36. Transporter BK9327PU, driver Feri.

- Laporan Harian Pabrik (Mill Daily Report) dated 30 November 2016, mentioned: non certified FFB received on that day was 138,143 Kg, in November was 138,143 Kg, and until November was 48,269,676 Kg.

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( NC / AOC / C )

E.4.2. The site shall inform the CB immediately if there is a projected overproduction of certified tonnage.

a. Does the site inform the CB immediately if there is a projected overproduction of certified tonnage ?

The responsible personnel (Mill Manager) understood that the site have to inform CB immediately if there is a projected overproduction of certified tonnage. There is no overproduction during last certification period.

C

E.5 Records Keeping E.5.1. The site shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO and PK on a three-monthly basis. All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO. The site can only deliver Mass Balance sales from a positive stock. Positive stock can include product ordered for delivery within three months. However, a site is allowed to sell short.(ie product can be sold before it is in stock.) For further details refer to Module C.

a. Does the site record and balance all receipts of RSPO certified FFB on a three-monthly basis ?

The site has record all receipts of RSPO certified FFB on daily basis, recapitulated it in monthly basis and balance it in three-monthly basis.

C

b. The site shall record and balance all deliveries of RSPO certified CPO and PK on a three-monthly basis ?

The site has record all deliveries of RSPO certified CPO and PK on daily basis, recapitulated it in monthly basis and balance it in three-monthly basis.

C

c. Are all volumes of palm oil and palm kernel oil that are delivered being deducted from the material accounting system according to conversion ratios stated by RSPO ?

All volumes of palm oil and palm kernel delivered are deducted from the material accounting system according to conversion ratios stated by RSPO.

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( NC / AOC / C )

d. Is the site only able to deliver Mass Balance sales from a positive stock ? Positive stock can include product ordered for delivery within three months. However, a site is allowed to sell short.(ie product can be sold before it is in stock.)

The site is only able to deliver Mass Balance sales from a positive stock. There is no delivery of RSPO certified CPO during December 2015 to November 2016. CPO is delivered as another certification scheme. Delivery records observed are:

- Transfer Stock No. TS 11303/DD22/02/16 dated 18/11/2016 regarding delivery of 1,000 MT CPO (other scheme certified) from PT. Hari Sawit Jaya, Negeri Lama 2 Mill to PT. Hari Sawit Jaya, Tangki Timbun Lubuk Gaung, Dumai.

- Weighbridge card No.PNDC116101421 dated 21/11/2016 described the commodity was other scheme certified CPO (ISCC) from Negeri Lama 2 Mill to PT. Hari Sawit Jaya, Lubuk Gaung Bulking – Dumai based on the above Transfer Stock. Nett tonnage was 27,060 Kg. Time in 11.03, Time out 14.32. Transporter: CV. Teman Setia (SPK #11004/SPK/HSJ/CPO ISCC/RSPO/16 dated 25 November 2016), unit: BK9699VO, driver Dermawan.

- Laporan Harian Pabrik (Mill Daily Report) dated 30 November 2016, mentioned: CPO delivered from January to November 2016 was 31,566.16 MT certified CPO and 8,352.94 MT non-certified CPO.

The mill delivered RSPO certified PK to PT. Hari Sawit Jaya – Kernel Crushing Plant. Delivery volume of certified PK from Negri Lama 2 Mill to Negri Lama 2 KCP was shown in Laporan Harian Pabrik (Mill Daily Report), e.g.: - LHP dated 30 November 2016 mentioned that certified PK

delivered in November was 880.190 MT and no non-certified delivered, and from January to November 2016 was 5,748.195 MT and non certified PK delivered was 2,625.003 MT.

- LHP dated 31 August 2016 mentioned that certified PK

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( NC / AOC / C )

delivered in August was 575.380 MT and non certified 300.620 MT, and from January to August 2016 was 3,422.051 MT and non certified PK delivered was 2,481.938 MT.

Lubuk Gaung Bulking is under PT. Sari Dumai Sejati which has been RSPO SC certified model IP, SG and MB by Control Union based on certificate number CU-RSPO SCC 821960 start date 30/08/2012 expired date 29/08/2017.

E.5.2. In cases where a mill outsources activities to an independent (not owned by the same organization) palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement.

a. Does the mill outsource activities to an independent (not owned by the same organization) palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified ?

No outsourced activity N/A

b. Does the mill have to ensure that the crush is covered through a signed and enforceable agreement ?

No outsourced activity N/A



PART C SUPPLY CHAIN CERTIFICATION SYSTEM

Supply Chain Certification System

Status ( Yes / No )

5.3.1

Has the client been made aware with necessary information concerning the RSPO Supply Chain Certification and the RSPO Rules on Communication and Claims Has the client been made aware with necessary information concerning the RSPO Supply Chain Certification and the RSPO Rules on Communication and Claims?

If potential clients have any further questions concerning the RSPO these shall be directed to the RSPO secretariat.

Yes

5.3.2 Has the client been made aware of the contractual agreement for certification services against the RSPO Supply Chain Standard and maintain a record of any agreement?

Yes

5.3.6 Has the organization been informed about the following items? Yes

a. Certification process Yes

b. Agree logistics for the assessment and time of exit (closing) meeting. Yes

c. Confirm acess to all relevant documents, field sites and personnel Yes

d. Explain confidentiality and conflict of interest

Yes

5.3.7 Have the management documentation of the organization fully met to the requirements of the RSPO Supply Chain Certification Standard?

Yes

5.3.7 Have any issues or areas of concern been clarified to the organization? Yes

5.3.7 Have the internal audits against RSPO supply chain standard been fully planned and underway before certification is awarded ?

Yes

5.3.8 Have the organization sufficiently and adequately implemented the organizational systems, the management systems and the operational systems, including any documented policies and procedures, to meet the intent and requirements of the RSPO Supply Chain Certification Standard?

No



Supply Chain Certification System

Status ( Yes / No )

5.3.8 Have the client made aware that when there is outsourcing process to the third party after certification is granted therefor SAI Global shall be informed and SAI Global decides whether an interim visit is required for the next audit ?

Yes

5.3.9 Has certification audit reviewed pertinent RSPO Supply Chain records relating to the receipt, processing and supply of certified oil palm products?

Yes

5.3.10 Have all activities conducted by subcontractors complied with the intent and requirements of the RSPO Supply Chain Certification Standard

N/A

5.3.11 Have the client made aware that until they receive written confirmation of their RSPO Supply Chain certification registration and its expiry date that they are not certified and can not make any claims concerning registration?

Yes

5.3.11 Have a detail records have been compiled of the entry (opening) meeting including a list of the participants in the meeting?

Yes

5.3.11 Have the client made aware of the findings of the audit team including any deficiencies which may result in a negative certification decisions or which may require further actions to be completed before a certification decision can be taken?

Yes

5.3.11 Have the client made aware that the findings of the audit team are tentative pending review and decision making by the duly designated representatives of the certification body?

Yes



3.4 Recommendation

The recommendation from this audit is continues.

Audit recommendations are always subject to ratification by RSPO.

This report was prepared by: Eko Purwanto, Eko Prastio Ramadhan, Ahmad Furqon and Nanang Rusmana 3.5 Environmental and social risk for this scope of certification for planning of the surveillance audit

Environmental risk: compliance with regulations, hazardous waste management, RKL RPL reporting

Social risk: compliance with regulations

OHS: prevention of hazard and risk

HCV assessment

SIA assessment and scope

Labour : contracts, wages, discrimination 3.6 Acknowledgement of Internal Responsibility and Formal Sign-off of Assessment Findings Please sign below to acknowledge receipt of the assessment visit described in this report and confirm the acceptance of the assessment report contents including assessment findings. Signed for and on behalf of PT. Hari Sawit Jaya

Welly Pardede Head of Environment and Sustainability Date: 31/5/2017 Signed for and on behalf of PT. SAI Global Indonesia

Inge Triwulandari Technical Manager Date: 31/5/2017



Appendix “A” – Audit Record

Date Auditor Audit meetings plus functions/ processes/

areas/ *shifts audited: # Shifts*

Times* From - To

19.12.2016 1st

day : Monday

All Travelling Jakarta – Kualanamu (Flight GA 180)

GA 180

05.35 – 08.00

All Travelling Kualanamu –Medan Station (Airport Train)

08.45 – 09.25

All Travelling Medan – Rantau Prapat (Sribilah Train)

10.37 – 16.14

All Rantau Prapat - Site 16.30 – 18.30

20.12.2016 2nd

day : Tuesday

Opening Meeting 08.00 – 08.30

Negeri Lama Utara Estate

Eko

Document Review, field visit and interview

Verification of corrective action on previous non conformity Agronomy Best Practice and Legal Criteria 2.2.1, 2.2.2 Criteria 3.1 (all indicator) Criteria: 4.1.1, 4.1.2 and 4.1.3 for estate, 4.1.4

Criteria: 4.2. 4.3, 4.5 all indicators Criteria: 4.6.1, 4.6.2, 4.6.3, 4.6.4, 4.6.5 Criteria 4.6.7, 4.6.8, 4.6.9 Criteria: 6.10 Criteria: 7.2, 7.4, Criteria: 8.1

08.30 – 17.00

Furqon

Document review, field visit, and interview Verification of corrective action on previous non conformity OHS : Criteria: 2.1 all indicators for OHS aspect Criteria: 4.6.11 Criteria: 4.7 all indicators Criteria: 4.8 all

08.30 – 17.00





Times* From - To

Nanang

Environment :

Criteria: 2.1 all indicators for environmental aspect Criteria: 4.4.1 Criteria: 4.6.6, 4.6.10 Criteria: 5.1, 5.3, 5.4, 5.5 and 5.6 all indicators Criteria: 7.1 (environment aspect), 7.7, 7.8 Criteria: 8.1 HCV : Criteria: 4.4.2 Criteria: 5.2 (all indicator) Criteria: 7.3

08.30 – 17.00

Pras

Document review, field visit, and interview Verification of corrective action on previous non conformity Social : Criteria: 1.1; 1.2; 1.3 all indicators Criteria: 2.1.1 for social aspect Criteria: 2.2.3; 2.2.4; 2.2.5; 2.2.6; 2.3 all indicator Criteria: 4.6.12 Criteria: 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11, 6.12, 6.13 Criteria: 7.1 (social aspect), 7.5 Criteria: 8.1

08.30 – 17.00

Interview with workers union, gender committee and workers

15.00

ALL Break 12.00 – 14.00

21.12.2016 3rd

day : Wednesday

Aek Kuo Estate

Eko

Document Review, field visit and interview

Verification of corrective action on previous non conformity Agronomy Best Practice and Legal Criteria 2.2.1, 2.2.2 Criteria 3.1 (all indicator) Criteria: 4.1.1, 4.1.2 and 4.1.3 for estate, 4.1.4

Criteria: 4.2. 4.3, 4.5 all indicators Criteria: 4.6.1, 4.6.2, 4.6.3, 4.6.4, 4.6.5 Criteria 4.6.7, 4.6.8, 4.6.9 Criteria: 6.10 Criteria: 7.2, 7.4, Criteria: 8.1

08.00 – 17.00

Furqon

Document review, field visit, and interview Verification of corrective action on previous non

08.00 – 17.00





Times* From - To

conformity OHS : Criteria: 2.1 all indicators for OHS aspect Criteria: 4.6.11 Criteria: 4.7 all indicators Criteria: 4.8 all

Nanang

Environment :

Criteria: 2.1 all indicators for environmental aspect Criteria: 4.4.1 Criteria: 4.6.6, 4.6.10 Criteria: 5.1, 5.3, 5.4, 5.5 and 5.6 all indicators Criteria: 7.1 (environment aspect), 7.7, 7.8 Criteria: 8.1 HCV : Criteria: 4.4.2 Criteria: 5.2 (all indicator) Criteria: 7.3

Pras

Document review, field visit, and interview Verification of corrective action on previous non conformity Social : Criteria: 1.1; 1.2; 1.3 all indicators Criteria: 2.1.1 for social aspect Criteria: 2.2.3; 2.2.4; 2.2.5; 2.2.6; 2.3 all indicator Criteria: 4.6.12 Criteria: 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11, 6.12, 6.13 Criteria: 7.1 (social aspect), 7.5 Criteria: 8.1

08.00 – 17.00


15.00

ALL Break 12.00 – 14.00

22.12.2016 4th

Day : Thursday

Negeri Lama Dua Mill

Eko

Document review, field visit, and interview Time bound plan for other management units and Partial Certification Requirements Supply Chain – Mill

08.00 – 17.00

Furqon

Document review, field visit, and interview OHS and Processing Best Practice : Criteria: 2.1 all indicators for OHS aspects

08.00 – 17.00





Times* From - To

Criteria: 4.1.1, 4.1.2, 4.1.3 for mill Criteria: 4.4.4 Criteria: 4.6.11 Criteria: 4.7 all indicators Criteria: 4.8 all

Nanang

Document review, field visit, and interview Environment : Criteria: 2.1 all indicators for environmental aspects Criteria: 4.4.1, 4.4.3 Criteria: 4.6.6, 4.6.10 Criteria: 5.1, 5.3, 5.4, 5.5 and 5.6 all indicators Criteria: 8.1

08.00 – 17.00

Pras

Document review, field visit, and interview Social : Criteria: 1.1; 1.2; 1.3 all indicators Criteria: 2.1.1 for social aspect Criteria: 2.2.3; 2.2.4; 2.2.5; 2.2.6; 2.3 all indicator Criteria: 4.4.2, 4.6.12 Criteria: 5.2 (all indicator) Criteria: 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11, 6.12, 6.13 Criteria: 8.1

08.00 – 17.00

Public consultation with external stakeholders (village head, contractor, public figure, ect)

10.00 – 12.00


15.00

ALL Break 12.00 – 14.00

23.12.2016 5th

day : Friday

All Review document 08.00 – 09.30

All Auditors team meeting 09.30 – 10.00

All Closing meeting 10.00 – 11.00

All Travelling Negeri Lama – Rantau Prapat Station

11.00 – 14.00

All Travelling Rantau Prapat – Medan (by Train Sribilah)

15.20 – 20.43

All Stay in Medan 21.00 - drop





Times* From - To

24.12.2016 6th

day : Saturday

All Travelling Medan – Kualanamu

All Travelling Kualanamu – Jakarta (Flight GA 183)

GA 183

09.00 – 11.25



Appendix “B” – Previous Nonconformities and Opportunity for Improvement Summary

No RSPO Criterion Details Corrective Action Completion Date PIC Status

Transfer Audit

1 RSPO PC 2013

Criterion 4.3.5

Drainability assessment before replanting for peat land has not been conducted

Monitoring of water level of Penampakan River and Bilah River conducted weekly starting at April 2016.

20 December 2016 Environment and Sustainability Officer

Open Repeated refer to NCR 2016-04

2 RSPO PC 2013 Criterion 4.7.6

Not all workers are covered by accident insurance (BPJS Ketenagakerjaan).

KTU monitor any new employees entering and programmed proposal of registration of BPJS Ketenagakerjaan to HRD Medan Office.

20 December 2016 HRD HTU



The outcome of HCV monitoring has not been fed back into the management plan

Carry out regular meetings to discuss and review feedback, monitoring results and progress of HCV management.




There is no regular reporting of the monitoring outcomes

Carry out training to the site’s sustainability team regarding GHG emission regular reporting to RSPO


Closed



Appendix “C” – Nonconformities and Opportunity for Improvement Summary

Section 1 Section 2 Section 3 Section 4

NC

R N

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Sta

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& c

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Cla

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Details of non-conforming situation and Objective

Evidence :

SAI Verification (how and

when)

Correction :

(immediate fix)

Root Cause and Corrective Action : (action to prevent recurrence)

SAI Global Response Review:

SAI Global Verification of Corrective Action for

Effectiveness:

2016-01

RSPO P&C 2013

Criteria 2.1.1

Major

Non-conformance :

Several regulations are not adhered to by the company

Objective evidence :

- It was found that PHL contracts not reported to Labour Agency of Labuhan Batu Regency as required in Kepmenaker No 100 year 2004 Section 12 clause 3 (KNU)

- It was found that PHL contracts not reported to Labour Agency of Labuhan Batu Utara Regency as required in Kepmenaker No 100 year 2004 Section 12 clause 3 (KAK)

Due Date:

23/02/2017

SAI Follow up Method: Evidence submitted to

Team Leader

a. Reporting to

Labour Agency

regarding casual

worker contracts

b. Send request letter

to HRD in Head

Office regarding

promotion of casual

worker to SKU

worker

c. Used oil changed

by soap water

Root cause:

- Lack of monitoring in

contracts reporting of

casual workers (KNU &

KAK)

- Limited sources of

competent labour and in

the other side, the casual

workers not yet comply

with SKU workers

requirement.

- Low in entrapment of

Stora nitens if only used

water.

Corrective Action:

- Appoint Personalia

Assistant (Krani) to

collecting, updating and

reporting casual workers

contract to Labour

Agency

Response:

Acceptable (please see section 4 for details)

Reviewer:

Eko Prastio R.

Date: 23/02/2017

Verification of Effectiveness:

The company have appointed Personalia Assistant (Krani) as PIC officer for collecting, updating and reporting casual workers contract to Labour Agency.

Prove of promotion request letter for casual workers in KAK and PND was sighted such as letter No 364/ES-KAK/EXT/12/16 dated 22 December 2016 and No 239/PND/EXT/DES/2016 dated 22 December 2016.

Prove of correction and corrective action was sight such as internal memorandum No 033/GM-NL/KNS/Des/2016 dated 27 December 2016.

Status : Closed

Name

Eko Prastio R.

Date:

23/02/2017




NC

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Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)

Root Cause and Corrective Action :

(action to prevent recurrence)



Effectiveness:

- Based on PHL work attendances (Period September – November 2016), It was found that PHL workers on behalf of Nova Harahap, Nurlela Br Manurung, Asnita Lase and Santika, have worked more or same as 21 days for 3 month consecutively and right now still working as PHL workers. This not complied to Kepmenaker No 100 Year 2004 section 10 article 3 (KAK).

- Based on PHL work attendances (Period September – November 2016), It was found that PHL workers on behalf of Hariman P. Bintang and Harianto have worked more or same as 21 days for 3 month consecutively and right now still working as PHL workers. This not complied to Kepmenaker No 100 Year 2004 section 10 article 3 (PND).

- Make a list of casual

workers who works

more than 3 months

continuously and send

them to competency

test/analysis before

propose to promotion

- Make an internal

memorandum to

change the use of oil

to soap water




NC

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Sta

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)

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Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

- The principle of re-use of used oil (reuse) for different purposes doesn’t comply with PermenLH No.2/2008 (Based on field observation in KNU and KAK was found that used oil was use as part of Integrated Pest Management (IPM) activity for trapping Setora nitens and Amathusia phidippus (fruit trap)




NC

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Sta

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(s)

& c

lau

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)

Cla

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Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-02

RSPO P&C 2013

Criteria 2.2.2

Minor

Minor Non-Conformities:

It was found inconsistency in maintenance of legal boundary. Objective Evidence:

- During field observation in KNU, HGU pegs number in the field was not in accordance with number in the map, e.g number 31 in field but number 23 in the map, and number 30 in field but number 25 in the map.

- Based on information from auditee and record of HGU pegs monitoring and checking, it was found that pegs number 24, 26 and 29 are missing or broken.

- Based on field observation at Aek Kuo Estate (KAK), from 4 HGU pegs sample (041, 042, 043 and 044), there was only 1 peg exist, which is #041.

- Based on Aek Kuo HGU pegs monitoring, longitude coordinate is only mention degree, there is no decimal or minute/second, so it’s difficult to crosscheck the coordinate.

Due Date:

Next Audit


Team Leader

Make a new peg and place it according to map

Root cause:

Peg were made according to number of pegs not according to map

Corrective Action:

Monitoring of HGU pegs

Response:


Reviewer:

Eko Prastio Ramadhan

Date: 23/02/2017


Will be checked during next audit

Status : Open

Name





NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-03

RSPO P&C 2013

Criteria 4.2.2

Minor


Inconsistency data on fertilizer records Objective Evidence:

There is inconsistency in amount of fertilizer (Kg) input between LUK and Recapitulation of Manuring in KNU, e.g. amount of MOP fertilizer application based on Recapitulation of Manuring in KNU until November 2016 was 782,449 Kg, whilst:

- Based on LUK chapter 12.2 (Stok Pupuk, Pestisida, Kacangan dan Polybag) was 1,007,949 Kg

- Based on LUK chapter 12.3 (Distribusi Pemakaian Pupuk, Pestisida, dan Kacangan) was 726,252 Kg.

Due Date:

Next Audit


Team Leader

Head of Administration (KTU) attached the related document called BPPB (Bukti Peminjaman Pupuk) and make a description of fertilizer stock in Estate Monthly Report

Root cause:

One of sister estate borrowed the fertilizer without appropriate documents

Corrective Action:

Warehouse operator make a BPPB document to everyone who want to borrow fertilizer and record it into Estate Monthly Report

Response:


Reviewer:


Date: 23/02/2017



Status : Open

Name





NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-04

RSPO P&C 2013

Criteria 3.1.1; 3.1.2 and 4.3.5

Major

(upgrade)


Drainability assessment before replanting for peat land has not been conducted Objective Evidence:

It was found that there is no records of drainability assessment prior to replanting on peat.

Due Date:

Next Audit


Team Leader

Coordinate with Bahilang R&D Department to arrange a Drainability Assessment document

Root cause:

Delay in data collectiong due to miscommunication between estate and R&D Department regarding when the data must send to R&D

Corrective Action:

a. Monitoring according to drainability assessment and subsidence procedure. Data will be sent to R&D Department monthly.

b. Manager and Asisstant Division will monitor and check the process (data collecting and analyse)

Response:


Reviewer:


Date: 23/02/2017


Evidence was sighted such as Drainability assessment conducted in February 2017 for PT Hari Sawit Jaya and PT Andalas Inti Lestari

Status : Closed

Name


Date:

23/02/2017




NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-05

RSPO P&C 2013

Criteria 4.4.1

Minor

Non-conformance situations:

A water management plan inappropriate with the implementation. Objective evidences: KNU

Based on field observation was found that overflow from the reservoir of sprayer’s bathroom on to the ditch.

KAK

Based on information from Spray Truck Driver and employees spray that the water from hand washing was not collected, but were left on the ground

Due Date:

Next Audit


Team Leader

- Has been fixed by

creating a trap to

lower retention

- Socialization

regarding the used

water from hand

washing activity after

pesticides application

in field

Root cause:

- Estate not understood

that reservoir of

sprayer’s bathroom

must be equipped with

trap

- Inconsistency in the

use of buckets for

hand-water wash

basins

Corrective Action:

Give an awareness annually especially about hazardous waste management

Response:


Reviewer:


Date: 23/02/2017



Status : Open

Name





NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-06

RSPO P&C 2013

Criteria 4.6.1

Major


It cannot be demonstrated that pesticide uses are comply to the regulations Objective Evidence:

It was found that license for pesticide material Kenlon 480 EC has been expired on 23 June 2016.

License and validity period of pesticide material Manuver 400 SL which is used in KAK was not found in the list of license (Rekap Izin Edar Agrochemical Plantation I).

Due Date:

23/02/2017


Team Leader

- Ask for licensed to

purchasing

department

- Added Manuver to

Monitoring of

Licensed in Monthly

Report

Root cause:

- Lack of monitoring of

pesticides licensed

- Monthly report not

monitored well

Corrective Action:

- Monthly monitoring of

pesticides license by

KTU

- Ensure all of license

recorded in Monthly

Report

Response:


Reviewer:


Date: 23/02/2017


The company have updated their list of license. It was sighted licensed for Manuver 400 SL is RI.01010120041981 valid until 9 December 2018. Meanwhile, license for Kenlon 480 is RI.01030120062433 according to Ministry of Agriculture Letter No 883/Kpts/SR.330/12/2016.

Status : Closed

Name


Date:

23/02/2017




NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-07

RSPO P&C 2013

Criteria 4.6.5 and 4.6.9

Major


The employee who was responsible in pesticide handling is not competent Objective evidences:

The employee who was responsible in pesticide warehouse did not understand the content of MSDS of Topsin M70, Cymbush 50 EC, and Sibutox 6 GR in English Language

Spray supervisor has not been given the training of pesticide handling (already worked as supervisor for 6 months)

Due Date:

23/02/2017


Team Leader

- Provide MSDS for

Topsin M70,

Cymbush 50 EC, and

Sibutox 6 GR in

Bahasa

- Contact the R&D

Department to held a

training

Root cause:

- Lack of monitoring by

HSE officer

- Lack of competency

monitoring in workers

transfer

Corrective Action:

- Socialization to

employee

- Ensure all workers have

adequate competency

before assignment

Response:


Reviewer:


Date: 23/02/2017


Evidence was reviewed such as records of training and socialization, also MSDS for Topsin M70, Cymbush 50 EC, and Sibutox 6 GR provided in Bahasa.

Status : Closed

Name


Date:

23/02/2017




NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-08

RSPO P&C 2013

Criteria 4.6.6

Major


There were inconsistencies implementations of waste management procedure B3 Hazardous. Objective evidences: KNU

Based on field observation was found that empty pesticides containers “eagle brand” used for breeding of Sycanus dichotomus

Based on field observation in replanting office was found that knapsack stored, not in the pesticides warehouse.

Based on field observation in the generator house was found that besides empty pesticide container (2 jerry can “bionasa” and 1 “elang”) used to store used oil.

Based on field observation was found that empty pesticides “elang” used as recycle bin in division office front of Policlinic.

KAK

Based on interview with the Traksi Officers was found that the trash in the traksi area and house of generator are using empty pesticide containers.

Due Date:

23/02/2017


Team Leader

- Replace with 5 liter

jerry

- Transfer to chemical

storage

- All of hazardous

waste have been

transferred to

hazardous waste

storage

Root cause:

- PIC of sycanus breeding

not understand about

Sustainability and P&C

RSPO

- Sprayer warehouse in

renovation so knapsack

placed in replanting

office for temporary

- Lack of awareness from

workshop workers

regarding hazardous

waste management

- Lack of awareness from

Plantation Assistant

regarding RSPO P&C

- Lack of awareness of

Workshop Assistant

regarding RSPO P&C

(KAK)

Corrective Action:

Conduct sustainability awareness annually and specifically discuss about hazardous waste. The participant are Site Manager, E&S officer, Assistant (Sustainability, Division and Worksop), Supervisor team.

Response:


Reviewer:


Date: 23/03/2017


Evidences of correction and corrective action was reviewed such as records from hazardous waste storage and etc.

Status : Closed

Name


Date:

23/02/2017




NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-09

RSPO P&C 2013

Criteria 4.6.10

Minor


The implementation of waste disposal has not been done in a proper manner Objective evidences: KAK

Based on field observation in TPSA was found that empty pesticides disposed.

Due Date:

Next Audit


Team Leader

Empty pesticides container transferred to hazardous waste storage

Root cause:

Lack of awareness of workshop operator

Corrective Action:

Conducted an annually Sustainability Awareness

Response:


Reviewer:


Date: 23/02/2017



Status : Open

Name





NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-10

RSPO P&C 2013

Criteria 4.7.1

Major Non-conforming :

It was still found several poor working safety practices at site implementation.

Requirement :

RSPO Criterion 4.7. indicator 1


Aek Kuo Estate

It was observed that the connection cable in the area of workshop (traksi) tool room was not closed.

It was observed the pressure indicator on the compressor unit at workshop was not available.

PND Mill

It was found the connection cable at the Boiler Panel was not closed

It was found the connection cable at the Water treatment unit without the wiring cover

It was found that the pump belt of sand trap tank without the cover belt for safety.

Due Date:

23/02/2017


Team Leader

Aek Kuo Estate - closed with adhesive

isolation

- Change to new one

PND Mill

- closed with adhesive

isolation

- Equipped with cover

belt

Root cause:


Workshop Assistant

regarding safety in

workplace (Estate and

Mill)

Corrective Action:

a. Conducted an annually Sustainability Awarenees and coordinate with Training Centre to specifically added about electricity safety

b. Internal inspection and briefing by Sustainability assistant

Response:


Reviewer:


Date: 23/02/2017


Evidences was reviewed such as record of correction action, sustainability awareness in January 2017 and the new pressure gauge was installed.

Briefing and inspection by Sustainability Assistant was conducted on 11 Jnauary 2017, record was sighted.

Status : Closed

Name


Date:

23/02/2017




NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-11

RSPO P&C 2013

Criteria 4.7.5

Minor It was found the information and emergency procedures of the chemical material was not available in a language understood by the worker.

.

Requirement :

RSPO Criterion 4.7. indicator 5


KNU Estate :

During audit was observed material safety data sheet (MSDS) of Sibutok was not available in a language understood by the worker in the chemical warehouse.

PND Mill:

It was observed material safety data sheet (MSDS) of Kuriless 648, Citric Acid, Blue test Barimo 10, Acetic 8, Phos TB was not available in a language understood by the worker in the mill chemical warehouse and the mill laboratory.

During audit was observed the worker did not understand the instructions and procedures of chemical material emergency response.

Due Date:

Next Audit


Team Leader

Translate to Bahasa Indonesia

Root cause:

MSDS were not monitored

Corrective Action:

Check and make a checklist of MSDS in Bahasa Indonesia

Response:


Reviewer:


Date: 23/02/2017



Status : Open

Name





NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-12

RSPO P&C 2013

Criteria 4.7.6

Major

(Upgrade)

Non-conforming :

Not all workers are covered by accident insurance (BPJS Ketenagakerjaan).

Requirement :

RSPO Criterion 4.7 indicator 6


Aek Kuo Estate

There were only 211 from 281 workers covered by accident insurance as seen by October insurance payment.

Due Date:

23/02/2017


Team Leader

Register the workers to BPJS Ketenagakerjaan

Root cause:

High workers turnover rate so PHL workers transfer from other area not yet covered by BPJS, so that their not directly registered once recruited.

Corrective Action:

Their BPJS will paid after one month working.

Head of administration (KTU) monitored the BPJS every month

Response:


Reviewer:

Eko Prastio R

Date: 23/02/2017


Evidences was reviewed such as list of workers that registered to BPJS Ketenagakerjaan.

Status : Closed

Name


Date:

23/02/2017




NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-13

RSPO P&C 2013

Criteria 5.2.4

Major

(upgrade)

Non-conformance situations

Endangered species of flora yet to be monitored continuously Objective evidences:

Based on field observation in the HCV Area endangered species Shorea bracteolate Dyer not yet to monitored

Follow up from the recommendation of HCV Monitoring Report 2015 has not been documented

Due Date:

23/02/2017


Team Leader

- HCV monitoring

accompanied by staff

who understand

about conservation

- Documented the

review of HCV

monitoring

Root cause:

- PIC for HCV monitoring

not competent in species

identification

- Management review was

conducted per semester

but not documented of

its result and only

attendance list that

recorded

Corrective Action:

- Sustainability assistant

will be accompanied by

assistant with forestry

background

- Scheduled HCV

management review

along with EMM that

held every semester to

discuss about HCV

management

Response:


Reviewer:

Eko Prastio R

Date: 23/02/2017


HCV monitoring was conducted in 28 – 29 December 2016 to look for Shorea bracteolate Dyer. On this monitoring, have accompanied by Mr. AA Sunu Diatmika (Forestry Degree from UGM). The result that species still found di HCV area. HCV monitoring and its review was sighted.

Status : Closed

Name

Eko Prastio R

Date:

23/02/2017




NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-14

RSPO P&C 2013

Criteria 5.3.3

Minor


Inconsistent waste management implementation Objective evidences: KNU

Based on field observation was found that the expired drugs 1 bucket full since 2011 at Policlinic has not been transferred to Hazardous Waste Storage.

Based on field observation was found that used filter 4 pcs, used lamp 1 pcs, and used batteries 3 pcs besides the generator houses has not been transferred to Hazardous Waste Storage

Based on field observation in the house of generator was found that used oil ± 100 litres, and based on information from the generator house officers already ± 6 months have not been transferred to the LB3 because wait until its full

Due Date:

Next Audit


Team Leader

- All of hazardous

waste transferred to

hazardous waste

storage

Root cause:


workers regarding

hazardous waste

management

Corrective Action:

Conducted an annually Sustainability Awareness

Response:


Reviewer:


Date: 23/02/2017



Status : Open

Name





NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

KAK

Based on document observation the reporting of Hazardous Waste to the Regent of Labuhan Batu Utara and Pusat Pengelolaan Ekeregion Sumatera (Quarter I, II and III 2016) yet to be shown during audit.

Based on field observation in TPSA was found that 1 piece of used oil filter

Based on field observation in TPSA was found that no open/close date sign

Based on field observation in Hazardous Waste Storage was found that used lamp 12 pcs yet recorded in the logbook

KAK

Attached the receipt note of report send to governance body

Make a board that informed open and closing notes of landfill

Root Cause:

List of monitoring reports was not available

Not aware that landfill needs to completed with open/closing note

Corrective Action :

Appoint a personnel as PIC to check and monitor the report

Ensure all landfill equipped with open/closing notes

2016-15

RSPO P&C 2013

Criteria 6.1.4

Minor

Non-conformance :

Evidence of stakeholder participation in social impact management and monitoring can’t be shown


Based on document review, social impact management and monitoring Y2015 , evidence of stakeholder participation not documented in report

Due Date:

Next Audit


Team Leader

Stakeholder involvement in monitoring and reporting process

Root cause:

PIC for social impact management not yet assign

Corrective Action:

Assign PIC for Social Impact Management and review the social monitoring report

Response:


Reviewer:


Date: 23/02/2017



Status : Open

Name





NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-16

RSPO P&C 2013

Criteria 6.5.2

Major Non-conformance :

Pay and conditions of employment not clearly detailed in the employment or service contracts. And also, several PHL workers not aware or not understood about their contract


Based on document review, it was found evidences such as :

e. PHL contract on behalf of Alum Panjaitan, Helpinra Manurung, Rosdiana, Melfariati and Nasip Barus, KNU, dated 1 October 2016, period of contract unknown

f. PHL contract on behalf of Nova Harahap, Nurlela Br Manurung, Asnita Lase, Santika and Sudirman Harahap, KAK, wages Rp.

90.000/work days, dated 1 July 2016 until 31 December 2016, participation in BPJS Ketenagakerjaan not stated in contract

g. Based on interview, several PHL workers not aware or not understood about their contract

Due Date:

23/02/2017

SAI Follow up Method: SELECT

- Addendum about

period of contract

and participation in

BPJS

Ketenagakerjaan

- Informed to workers

about their contracts

- Coordinate and

informed HR

Department in Medan

to revised the content

of contract

- HR krani check the

contract workers and

inform HR

Department if any

misleading in the

contract

Root cause:

- Lack of monitoring of

contract workers

- Miscommunication

between HR krani about

content of PHL workers

contract

- HR Department not

aware about the

requirement

Corrective Action:

- Appoint a personnel as PIC to check the workers contract and explain it to HR Department about the content of contract that need to covered

- Ensure there are no discrimination and coercion in workers contract

Response:


Reviewer:


Date: 23/02/2017


Evidences was sighted such as Internal Memorandum for Appointment of HR Krani as PIC to check and monitor the workers contract.

a. Internal Memorandum No 112/ES-KNU/MEMO/02/17

dated 18 February 2017 b. Internal Memorandum No

001/MGR/KAK/JAN/2017

dated 3 January 2017

Other evidences are revised of contract form and socialization to workers regarding their contract on 10 January 2017.

PIC to communicate with HRD Manager is Mr. Welly Pardede (Head of ECSR Dept), this is communication between managerial level.

In operational site, HR Krani checked the contract for any misleading in contract and will inform the HR Department staff (PIC) to revised it.

Status : Closed

Name


Date:

23/02/2017




NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

h. Clauses 6 in contract SKU

and PHL worker stated

that If employee doesn’t

want to transferred, then

employee considered

resigning

2016-17

RSPO P&C 2013

Criteria 6.5.3

Minor Non-conformance :

It was found in KAK, TPA (child care) facilities is inadequate condition


Based on field observation of public facilities in Kebun Aek

Kuo. Currently, the plafond of TPA is in damage condition.

Due Date:

Next Audit


Team Leader

Child care in renovation process

Root cause:

Some of facilities is old and miscommunication to renovate it. In last year asset internal audit, TPA was not checked

Corrective Action:

Make a registry of all facilities and their conditon as first step before determining priority to repair house/public facilties

Response:


Reviewer:


Date: 23/02/2017



Status : Open

Name





NC

R N

r.

Sta

nd

ard

(s)

& c

lau

se(s

)

Cla

ss

ific

ati

on


Evidence :

SAI Verification

(how and when)

Correction :

(immediate fix)





Effectiveness:

2016-18

RSPO P&C 2013

Criteria 6.8.1

Major Non-conformance :

It was found in employees contract, statement that considered as discrimination


Based on document review, It was found in employees contract, statement that considered as discrimination such as If employee doesn’t want to transfer as mention in point 5 then employee considered resigning.

Due Date:

23/02/2017

SAI Follow up Method: SELECT

- Coordinate with HR

Department in Medan

to revised the content

of contract

Root cause:

- HR Department not

aware about the

requirement

Corrective Action:

a. Ensure there are no discrimination and coercion in workers contract.

b. PIC to communicate with HRD Manager is Mr. Welly Pardede (Head of ECSR Dept), this is communication between managerial level.

Response:


Reviewer:


Date: 23/02/2017


Evidences was sighted such as revised of contract form..

Status : Closed

Name


Date:

23/02/2017



Appendix “D” – Stakeholder’s issues and comment

Date Stakeholder Feedback and or request PT HSJ response and action to be

taken SAI Global audit observation Relevant documentation

20.12.2016 KNU workers

- Casual workers (PHL) doesn’t know about their contract

- Casual workers (PHL) doesn’t get BPJS Ketenagakerjaan

- PPE provided by company

- Salary comply to national law (decent living wages)

- Beside salary, SKU worker get Rice Ration every month.

- No sexual harrasesment case

- Sprayer worker get extra fooding

- Workers tell their complaints directly to their supervisor

- PPE will be change if the old ones is damaged

- Women workers who in pregnant or breast-feeding condition are prohibited work as sprayer or fertilizer

- Worker’s house will be repaired upon request to Supervisor. If the material is ready in the storage then it will repaired as soon as possible

- Zero burning - Riparian buffer zone is prohibited for

chemical treatment - Hunting protected wildlife is

prohibited

-





20.12.2016 KNU Union

- Some of casual workers (PHL) doesn’t get BPJS Ketenagakerjaan

- Compalints from workers regarding the replacement of damaged PPE that took time

- Monthly contribution is Rp. 21,000 per member

- Salay is comply to national law - Workers can tell their complaint

directly to their superior

-

21.12.2016 KAK workers

- Salary comply to national law

- PPE provided by company




- Sprayer worker get extra fooding


- PPE will be change if the old ones is damaged

- Women workers who in pregnant or breast-feeding condition are prohibited work as sprayer or fertilizer

- Worker’s house will be repaired upon request to Supervisor. If the material is ready in the storage then it will repaired as soon as possible

- Zero burning - Riparian buffer zone is prohibited for

-





chemical treatment - Hunting protected wildlife is

prohibited

21.12.2016 KAK Union

- Union workers in KAK separate with union in KNU

- Salay is comply to national law

- Workers can tell their complaint directly to their superior

- Established in 2015, and right now still in socialization process to all workers

-

21.12.2016

Committee Gender

(Negeri Lama Group)

- Committee gender activities such as socialization of sexual harassment, health for children and mother (Posyandu), religion events and PKK

- Until now, there is no case or complaints from women workers concerning sexual harrasment

- Women workers who still nursing their childen or in pregnant condition, not allowed to work as sprayer and fertilizer team or high risk job

-

-

22.12.2016 PND workers

- Casual workers (PHL) get wage Rp. 90.000/workdays





- PPE will be change if the old ones is

-





damaged - Worker’s house will be repaired upon

request to Supervisor. If the material is ready in the storage then it will repaired as soon as possible

- Zero burning - Hunting protected wildlife is

prohibited

22.12.2016

Stakeholder (Head of

Subdistrict, Head of Village,

Farmers, Cooperative/K

operasi)

- Recruitment for local workers still minimum. Most of the workers in company were recruited from outside district or region.

- Local authorities several times request for local workers recruitment but responded by verbal communication without realization

- Sei Tampang village, Tanjung Haloban and Sei Tarolat village have not received CSR program like Sidomulyo village. The only assistance give by company is clean water assistance

- Subdistrict authorities have send a request for land to build school, it has respoended by company through verbal communication. However, after 1 year there is no follow up from company about it.

- In water gate management, the company should consider the condition in Dusun 1 and Dusun 2 Sidomulyo village. Right now, there is flood in both of Dusun because of water from company canal

- Famers group hope the agreement to

-





road maintenance can be realized in accordance to its program.

- Continuous communication with stakeholder need improvement

- There are no transparency in CSR program



Appendix “E” – Definition of, and action required with respect to audit findings:

Major Nonconformities occur when system is failing to meet a relevant compulsory indicator. Action required: This category of findings requires SAI Global to issue a formal NCR; to receive and approve client’s proposed correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action. Correction and corrective action plan must be submitted to SAI Global for approval within 14 days of the audit. Follow-up action by SAI Global must ‘close out’ the NCR or reduce it to a lesser category within 90 days or less where specified. Certificate of conformance to the RSPO Criteria cannot be issued while any major nonconformity is outstanding. Major nonconformities raised during surveillance audit shall be addressed within 60 days, or the certificate will be suspended. Major nonconformities not addressed within a further 60 days will result in the certificate being withdrawn. Minor Nonconformities occur when system is failing to meet other indicators. Action required: This category of findings requires SAI Global to issue a formal NCR; to receive and approve client’s proposed correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action. In this instance, a certificate may still be awarded providing the root cause of the problem is identified and an acceptable plan is put in place to achieve the outstanding requirements in an agreed time frame. Verification will be made at subsequent surveillance audits. Minor nonconformities will be raised to major if they are not addressed by the following surveillance audit. Opportunity for Improvement is a documented statement, which may identify areas for improvement, but shall not make specific recommendation(s). Client may develop and implement solutions in order to add value to operations and management systems. SAI Global is not required to follow-up on this category of audit finding.



Appendix “F” – Definition of, and action required with respect to audit findings for Supply Chain Certification System:

Major Nonconformities occur when system is failing to implement and/or maintain requirements of Supply Chain Certification System. Action required: This category of findings requires SAI Global to issue a formal NCR; to receive and approve client’s proposed correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action. When non-conformances rose after the certification, RSPO shall be informed of these non-conformances within 7 days since non-conformance rose. A maximum of one month is given to the certified client to satisfactorily address the non-conformances. The effectiveness of the action taken for the non-conformances shall be assessed before closing o ut the non-conformances. Should the non-conformances not be addressed within the one month maximum time frame, a suspension or withdrawal of the certificate and a full re-audit may be necessary. Where objective evidence indicates that there has been a demonstrable breakdown in the supply chain caused by the certified client’s action or inactions, and that palm oil product that has been or is about to be shipped is falsely identified as RSPO certified product immediate action needs to be taken by SAI Global, and the RSPO Supply Chain certification shall be suspended until such time that it has been addressed. The RSPO shall be notified within 24 hours of this occurrence and further impacts on relevant supply chain certifications. Area of concern issued when there is an area of the system for which the client is required to investigate potential non-conformity. Action required: SAI Global may require client to formulate preventive action plan for approval prior to next planned audit/certification decision or alternatively may follow up client’s preventive action at the next planned audit. Lack of client attention to such issues implies that a preventive action system is not working effectively. Opportunity for Improvement is a documented statement, which may identify areas for improvement, but shall not make specific recommendation(s). Client may develop and implement solutions in order to add value to operations and management systems. SAI Global is not required to follow-up on this category of audit finding.